When should a business owner be entitled to salary?

[Adam13]

It really depends on what works for you really. Some people have this special gift of converting small business into great ventures and starting small wouldn't mean anything to them. However getting a loan helps save one from all the stress and hurdles you would encounter if one has started small. It has the disadvantage of uncertainty. If one procures a loan and then the business's ends up flopping then there's a problem.

 

[Samson19]

You should only pay yourself out of your profits – not your revenue. When you see money coming into your business, don't assume you can pay yourself a big slice of that. Before you take your cut, you also need to take account of things like taxes, payroll, fixed costs and overheads.

 

[Aotosyno]

A business owner should be able to pay himself when he knows that the salary won't affect the business negatively.This can be from 6month or say a year when the business has gained ground and is doing well likewise the turnover too.

 

[Samson19]

You should only pay yourself out of your profits – not your revenue. When you see money coming into your business, don't assume you can pay yourself a big slice of that. Before you take your cut, you also need to take account of things like taxes, payroll, fixed costs and overheads.

 

[Akinwale701]

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?

It is not called stealing as you have said, in accounting, we refer to it as personal drawing and it must he accounted for as an expense. However when business is able to make enough profit to be able to pay employees, the owner should be on the payroll as well.

 

[btaliat]

The poster has truly said my mind. If the business owner refuse to be receiving salary, he may end up spending the money for business purposes on personal projects which may lead to collapse of the business.
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The poster has truly said my mind. If the business owner refuse to be receiving salary, he may end up spending the money for business purposes on personal projects which may lead to collapse of the business.

 

[maventiger]

It is not called stealing as you have said, in accounting, we refer to it as personal drawing and it must he accounted for as an expense. However when business is able to make enough profit to be able to pay employees, the owner should be on the payroll as well.

@Akinwale701 in understand you are looking at the topic discussed from the Accounting principles if I may say. But you should not forget that business is an entity of it own and such personal drawing can hinder the growth of the business.

 

[Akinwale701]

Sure, normally the best way to run a business is to also treat yourself as an employee as well. This will enable you to know how much the business is making as either profit or loss. This is why there's personal drawing in accounting.

@Akinwale701 in understand you are looking at the topic discussed from the Accounting principles if I may say. But you should not forget that business is an entity of it own and such personal drawing can hinder the growth of the business.

 

[maventiger]

Sure, normally the best way to run a business is to also treat yourself as an employee as well. This will enable you to know how much the business is making as either profit or loss. This is why there's personal drawing in accounting.

well @Akinwale701 I understand your views, but at such an early stage of a business it important to make drawings that affect the business either directly or indirectly. Personal drawings that doesn't affect the business will hamper the growth of the business.

 

[Hellen]

You don't even have to call it salary, because it doesn't make sense. He can use a portion of the income at any time to finance any of his personal project that might tell directly or indirectly on the original business.

 

[Deebabs123]

If you are small business owner with few or even no employees then it becomes very simple to decide what to pay yourself as a salary. But in the fortunate circumstance of you having your business grow, or having a bigger business to begin with, or are in the process of acquiring a new business partner you will need to find how much you can actually pay yourself.
Going about setting your own pay can be a daunting task if not done right. This is even more true in the markets where in lots of fluctuations are seen.

 

[Shigobad20201]

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 should onky be entitle to salary after he might have paid all his or her employee salary and after he has also checked the business recording and see if he's making process and if the answer is yes , then he can start earning salary or rather use the gain to add more good to the company.

 

[Mostee501]

From my perspective,a business owner should start paying his/her self, when the business has shown progress and has reasonable profits for awhile,and it's already established,that's when i feel it is right.

 

[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..

Yes the steal word is quite unnecessary but business owners should place themselves on a salary to avoid spending profit anyhow because it can lead to bankruptcy. Remember that most small businesses fail within the first year of operation and the no.1 factor is finances.

 

[Eodine]

I quite agree with your point. A business owner should first settle any necessary expensed before considering himself at the early stage of the business. But, the owner has the right to have some money for personal use if it has been calculated to have little or no effect on the business.

 

[Sincerem]

Interesting points you made @maventiger. A business owner should be focused more on driving more financial success to the business before deciding how much he or she will be taking away from the business as salary or whatever.

 

[Dowenship]

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?

Haha.... stealing!!??? How? Strong is the at of taking something that doesn' belong to you, if the business does not being to him then you can regard that add stealing as long he used his money to fund the business the act is never a stealing one...

 

[Cash%]

When the business owner is already making more profit from the platform then through that medium , i think the business could start having basics of having his or Own salary as speculated too
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When the business owner is already making more profit from the platform then through that medium , i think the business could start having basics of having his or Own salary as speculated too

 

[Kane]

When I had my brick and mortar business, I allowed myself salary from the first month. Since I had paid workers and I gave them salary and I was also working as much as my worker, and sometimes even more, I was also entitled for salary.

 

[Samuel77]

It is a very good choice for a business owner to be entitled to salary, i see this as a best idea. it will help you in keeping the record and also it will help your business to grow fast, taking money from your business to solve problems at home might make your business have break down.