How Much Can I Pay Myself As a Business Owner?

Paying yourself as a business owner can feel tricky, right? You’ve poured your heart into your business, but how do you know what’s fair to take home without hurting growth? Let’s break it down so you can confidently pay yourself while keeping your business thriving.

1. Understand Your Business Finances

Before deciding on a number, get a clear picture of your business's money. Look at your cash flow, profit and loss, and overall financial health. Don’t worry, it’s not about drowning in spreadsheets. It’s about knowing what’s coming in, what’s going out, and making smart choices for both you and your business. Tip: If you need a step-by-step guide to tracking your business finances, check out our Ultimate Accounting Checklist.

2. Check Your Business Stability

If your business is just getting started and profits aren’t consistent yet, it might make sense to reinvest more back into growth. But if your business is stable and thriving? You have a little more room to treat yourself. Think of it as balancing smart business decisions with self-care.

3. Know the Market (and Your Worth)

Peek at what other entrepreneurs in your industry are paying themselves. This gives you a benchmark and helps you feel confident you’re not underpaying or overextending your business. Chat with fellow business owners, attend events, and stay in the loop on trends.

4. Factor in Your Personal Needs

Your salary isn’t just about the business; it’s about you, too. Consider living expenses, debt, and personal financial goals. Make sure you’re taking enough to cover your needs while leaving enough in the business to run smoothly and grow.

5. Align With Your Goals

Where do you want your business to go? If you’re in growth mode, reinvesting profits might be the move. If things are steady, you can be more generous with your own paycheck. Your salary should match both your personal lifestyle and business plans.

6. Keep Legal & Tax Stuff in Mind

A quick chat with a tax pro or financial advisor can save headaches later. You want to make sure your salary setup is legal, tax-smart, and sets you up for long-term success. Understand all the rules to avoid penalties - Paying Yourself | IRS

Paying yourself as a business owner is a balancing act, but it’s totally doable. By considering your finances, business stability, industry standards, personal needs, goals, and taxes, you can find the sweet spot that keeps both you and your business happy. Remember, your salary can (and should!) evolve as your business grows.

Take charge of your finances and pay yourself confidently, stress-free. Join BYOB+ and get access to expert accountants, bookkeeping support, and a community of like-minded female entrepreneurs. Say goodbye to financial overwhelm and hello to smarter business decisions. Join BYOB+ today!

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