You started your own business to do something you love and make money. But how much should you pay yourself? Too little and you may struggle to survive. Too much and your business might be at risk. So how do you strike the right balance?
Pay Yourself From Profits
If you’re a new business owner, don’t make the common mistake of confusing revenue with profit. 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 need to first take into account things like taxes, payroll, fixed costs and overheads. This is why good accounting software is so important. It will let you keep track of all expenses and calculate profit rather than revenue or turnover. It will also help identify areas you can make tax deductions. Then you can quickly see whether your company is making enough money to afford to pay you. READ MORE>>
Want to learn more about ensuring a healthy cash flow so you’re able to meet payroll consistently? Click below to discover our tips.