One of the toughest things when it comes to being an entrepreneur is that it’s really hard to figure out how to pay yourself. There are lots of things you have to take into account in a situation like this. But the most important one is figuring out what amount you should be ok with as your income.
The best plan you can use to pay yourself
First, you have to figure out the total income for the month. Once you perform those calculations, you will be able to see how much money you can use for these costs. From that amount, you need to invest around 20% in your employees, be it via salaries, raises, bonuses, team building, etc.
Another 20% should be used to create cash reserves for your business. You never know when you may need some extra cash, so it’s important to put some money aside. This will certainly cover some of the operating expenses.
30% should also be put aside for the taxes that may appear. Every business has to pay a lot of taxes, and 30% of the income should be more than ok to cover that.
At the end you will have 30% to split between partners. Ideally you need to make sure that you split this evenly, so there are no problems or issues. It will help you a lot more than you would imagine, as you get to do an even split and results will be a whole lot better in that regard.
Is this plan feasible for all businesses?
Normally yes, it will work for any company regardless of its industry. Sure, you can make adjustments here and there, but for the most part, this will bring you the utmost value and quality that you may be looking for. Of course, you can always adjust it if you want to. There is no 100% guaranteed solution for every business.
But this is certainly a good start for a situation like this. It will surely do wonders; the idea is to know how to tackle this correctly and to adjust everything to your own business. For the most part, it will be well worth it, so try to take that into consideration if you want to. The results can indeed be second to none if you use such an approach, but you do need to be fair with the way you split everything. Splitting the amounts evenly will remove any suspicions, and it will make things a whole lot better in the end.
Remember, adjusting these amounts and making sure that everything is done correctly is a crucial part of the entire process. But once you tackle this correctly, the results can be well worth it. Always consider paying your employees more, as that is extremely important. As long as you help your employees grow and evolve, you will be ok paying yourself a higher amount. But ideally, you want to invest back in your business if you can.