You are an entrepreneur and started your own business because you are passionate about your work … but earning the money you thought you should have made when you were working for someone else I wasn’t there, so I started the business. You were building someone else’s business, contributing to someone else’s bottom line, and buying someone else’s next Mercedes. You have decided that it is enough, and you can do it yourself, make it better, and you can make all the money you deserve at the same time!
And you’re right, you can do it, you make it better, and your business is making money! But for some reason, your bank account doesn’t reflect that to you. You still feel alive from salary to salary (or project to project), and you feel less to show for your hard work than you ever thought.
After collaborating with hundreds of business owners, one of the most common threads among business owners who are overwhelmed and at risk of burnout is They do not pay themselves from their business on a regular basis.
In fact, research confirms that, showing that only 51% of small business owners pay their own salaries. You might think, “It doesn’t matter, I sometimes take the owner’s draw!”
Sometimes taking an owner tie is not the same as recreating a salary for yourself from your business. When your income is sporadic and you are paying everyone and everything else before you pay yourself, so that you can’t rest to charge, and you’re ready to go As you are, you will be much more likely to feel overspread and return to work for someone else so that you can have that “stable salary” again.
Another thing I learned from talking to hundreds of entrepreneurs is that there is almost always cash in the business that should be allocated for the owner’s payment, it hasn’t been taken yet. !! It is in a business account or spread across several different accounts. Because there is a fear that one day the business will need that cash for something … but it is not allocated as emergency funds or business savings. Or something else that could be a legitimate need. It only sits in a checking account to cover needs based on future fears that do not exist.
So what is the shift? The shift is to recreate the stability you crave, even if you are responsible for your income!
First, plan your normal costs. Take a critical look at your income statement and compare the amount you actually spend each month with the incoming revenue.
Second, create a system to split your income as it comes in – We often recommend Profit First by Mike Michalowicz as a starting point for business owners who have never implemented a clear system. If you’ve never had a stable income in your business, don’t go full throttle and jump into a complete system right away. Create a plan for gradual deployment so that changes continue.
Third, stay with it! You will want to go back, and probably sooner rather than later. Whenever you make a change, it is tested to see if you want to keep it. So if you start to feel the difficulty and want to go back to not paying for yourself, keep using the system. Don’t raid your tax savings or use your profits to bail out your business. Find a way to get your business right.
And fourth, allow yourself to enjoy your business and your income. Again, you started your business because you were passionate about what you did and how you did it, and wanted to earn something of your own value. Remember to take the time to enjoy what you are building and the income you are earning, and to be proud of yourself.
Once you are in control of your income, continue reading the next steps on your income, and then read the tips for managing your increasing tax burden when the tax time comes.
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