Are you wondering how you can start paying yourself a salary as a business owner? This article is for you.
Most small businesses make the mistake of not paying themselves a salary from the business, instead they spend and withdraw directly from the business account for personal purposes. This is very unhealthy and can result in the death of your business.
Here are steps to begin paying yourself a salary in other separate your earning from your business’ earnings:
- Determine how much PROFIT your business makes on average every month:
You should be keep records of all your sales and all the expenses you incur every month, this two information would help you determine how much profit you make at the end of each month and how much you can afford to pay yourself as a salary.
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- Determine your business’ budget and goal for the year:
This will help you determine how much you need to be saving in the business accounts every month. You might be making N100,000 every month in profit but should not pay it all as a salary to yourself you might need to save N30,000 every month towards buying a new equipment or expanding the business in the future.
- Determine your salary and bonus:
Once you have followed the previous two steps, you should be able to determine how much your business can pay you and stay afloat. The difficult part is sticking to paying yourself this exact amount every month end!
You can also create a bonus system for yourself where you pay yourself an additional bonus for making more sales every month as a way to motivate yourself and increase your earnings.
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