The dream of running your own business began with certain expectations and desires, including making more money and finding more satisfaction in your work. But, sometimes, it may feel that neither of those things is true.
Let’s take stock and see how you may have gotten sidetracked and map out a strategy to get you back in the driver’s seat.
For many small business owners, the feeling that things aren’t going as they envisioned often begins with recognizing they’re underpaying themselves. Some studies have reported that only half of entrepreneurs even pay themselves a salary. Instead, they take an “owner’s draw,” when they feel there’s enough on the balance sheet to do so.
By not creating a regular paycheck for yourself, you can start to feel burned out, as you work harder than you may ever have, but don’t seem to have nearly enough to show for it, small business owners frequently report.
Rather than an “owner’s draw,” you may want to consider designating “owner’s pay,” from funds that are frequently available in your businesses account if you look in the right place and in the right way.
If you’re leaving money in a business account where it’s not really doing your enterprise any good, you might be better served to earmark a portion of it for your salary. You’ll be feeling more valued and more enthusiastic about the business you care about, and, by extension, you’ll actually be giving your business a shot in the arm.
This may sound “easier said than done,” but here are a few points to keep in mind:
1. Map out your regular expenses – see just where you’re making and losing money so you can stabilize your business finances.
2. Create your own system for dividing your income as revenue comes in – when you accomplish this, you’ll feel more confident about drawing a regular salary.
3. Remember to take time to enjoy your business. It was your dream, enjoy it- and reward yourself for all of your hard work.
If you need help determining a salary for yourself that is both appropriate and affordable for your business, please reach out to one of our accounting advisors for assistance. We will be happy to help you come up with a plan.