When should a business owner be entitled to salary?

[Sheun450]

Determining your salary is one of the most important decisions you'll make as a business owner. Here's how ... It's an age-old conundrum that faces every entrepreneur planning their business: What do I pay myself ?

 

[Mama]

Because a person is the business owner doesn't mean the person should not be entitled to the money the money generate for his own personal use. Should the person starve or what. So he can, only he needs to use his brain while doing that

 

[mubinadaddy]

A business owner should be able to pay himself at most from 6months after the business startup. And before doing that you need high level of discipline. You need to set goals aside on what you will achieve. You need a backup plan to support your business growth. You must be putting efforts in the company growth on a daily basis. Then when paying staff salary you will have to pay yourself first before paying others.

 

[maventiger]

At an early stage of the business, the business needs adequate funding. The more reason some financial expert advised that an entrepreneur should always have a plan in place when it comes to financing the business. It is advisable not to start a business without adequate funding.

 

[Husnainali]

If you are a sole proprietor you are not an employee and you don't take a salary in the form of a regular paycheck. No FICA taxes (Social Security/Medicare) are deducted and no federal or state income tax is withheld. A sole proprietor gets "paid" by drawing money from the business

 

[Hdre3m3n]

To me, a business owner taking out of the business earnings for personal projects at an early stage of the business is STEALING FROM THE BUSINESS.

A business owner who wants the business to grow won’t be tempted to use the business earnings for personal projects. The owner should be entitled to salary when the business is having steady cash flow.



Have you been stealing from your business?

A business owner or entrepreneur should be able to discipline himself. Taking out of your business earnings at an early stage will only ruin the business. There should be a level at which the business attains before you do something like that

 

[Nurudeen]

At least before I think a business owner should be entitled to salary or start spending some of his or her salary the person should be able to have developed the business for atleast up to 6 months so that the person won't collapse the Business

 

[Sake]

I mean if you have a business and all you do is manage it how can you survive without taking money from it? It's not like the business is not generating incomes and you're not going to take away part of your capital... Why do you start a business? Is it for yourself and maybe family or just for the sake of having a business?

 

[Mahnoor]

Compensating yourself is important for you and your company," Bredin told Business News Daily. "If you are not allocating funds for your own salary, your books do not accurately reflect the health of your company, since your expenses are missing a large cost, namely you. Without factoring in all expenses, you won't know if you need to raise prices, market more, cut costs or make other adjustments that will help your company succeed."

"Some entrepreneurs work for free for much too long," added Evan Singer, president of SmartBiz, a provider of Small Business Administration (SBA) loans.

 

[Esther]

The main reason someone gets into a business is to make a living out of it so when you venture into any business you have to pay your self salary I mean you worked so hard to make the income why not take your profit out and continue please pay your self you deserve it.

 

[unhappy triad]

It has always been the capita for me. The facilities too are not affordable. I need more earnings. I needed changes I need more returns and more staffing. These are just the basic. Maybe a loan will do

 

[Junaid]

There's no place where self-discipline plays a more important role than in setting your own salary. As the owner and founder of your business, you can allocate as much or as little of the company's profits as you want to your own paycheck. You can even decide to go further: You can tell your accountant to cut you a check equal to the entire month's sales. That'll be a high-water mark for your earnings, however, since draining that much cash will ensure that it's your last month in business.

 

[Neeta313]

You are right, as a business starter, you shouldn't start spending from your earnings, you have to wait for your business to grow and develop properly before you can start thinking of taking from it, as a beginner it is not really advisable for you to start taking the profit early it may not go well for your business.

 

[Alexandoy]

When you make a start up that you cannot handle then you will hire a manager and staff, right? If you think the manager should be paid, of course, then whoever is the manager should have a salary. In clearer sense you have to be paid a salary if you will be handling the business even if you are the owner. It is unfair if you will not have a salary.

 

[Thosynho]

I totally agree with you a business owner should not start spending or taking from the income of the business at an early stage, because it can crumble the business. It is advised that when the business has grown for stability of the business the owner should put himself on a salary scale to protect the business.

This is right. A business owner can be entitled to salary when the business has really grown to a stage where the capital invested as risen to triple fold and has expanded well enough without owing anyone.

 

[Adventurer]

I quite agree with you, but not completely with all your statements. How do you mean steal? One can spend his or her profit after proper calculations have been made. It is normal to eat where you labour. Please keep that line in mind..

For financial clarity it is better to draw up a salary unless you're not operating a structured business, if money is needed for any project it's best to be stated. This is very important as cash flow is one of the reasons many businesses crash.
Draw up a salary that you believe will be adequate for your spendings.
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I quite agree with you, but not completely with all your statements. How do you mean steal? One can spend his or her profit after proper calculations have been made. It is normal to eat where you labour. Please keep that line in mind..

For financial clarity it is better to draw up a salary unless you're not operating a structured business, if money is needed for any project it's best to be stated. This is very important as cash flow is one of the reasons many businesses crash.
Draw up a salary that you believe will be adequate for your spendings.

 

[Maks25]

When you are a CEO (Especially your own boss),
You basically need no further compensation than just that.
The fact that you get to own your OWN firm,
Tell your OWN people how you want to run you OWN things,
And TAILOR your OWN ideas for an implementation is massive enough
That inner joy you get doing these thing is unquantifiable with MONEY.
Try it too, then thank me later!!

As a business owner I think it is up to you to decide when and how you want. You get to pick when you want to start taking profit from your business. But I think it is smart to let profit slide back into the business until it is stable.

 

[maventiger]

This is right. A business owner can be entitled to salary when the business has really grown to a stage where the capital invested as risen to triple fold and has expanded well enough without owing anyone.

@Thosynho very true that s business owner should be entitled to salary when the business has really grown to a stage where the capital invested as risen to triple fold and has expanded well enough without owing anyone. Even after then, the owner can still re invested what would have been his own salary in the business. I Know renowned CEOs that never collect salary for 20 yrs in business.

 

[Olahab]

When money is tight, a small business owner's salary is often the last priority on the budget. But as your business income becomes more stable, paying yourself becomes much more feasible.

"After a long, challenging economic period, some business owners are enjoying an uptick in revenue," said Bredin, citing trends identified by American Express OPEN

 

[Neta Sam(Samuel Odunlade)]

When you need to start taking salary is when you know that your business is balanced. It also depends on how many staffs you also have who must also be payed. So you need to bare to the Brunt for the main time, before you start paying yourself.