Owner! Pay Yourself A Market-Based Wage
What an owner pays themself is a high controversial topic. It’s often because no one ever asks them about what they pay themselves and why they made that decision. That question is usually off-limits. But even if no one asks that question of you, it matters. If you’re watching this video, you need to consider paying yourself a market-based wage. Failure to do so often means you’re getting a clouded view of your Net Income and as a result, the real health of your business. In this video, Tom outlines the reasons you need to think about this, as well as some hard questions you should ask yourself as both an employee and shareholder of the business.
A Follow-Up Question Came to the Video Above
In response to this Market-Based Wage video, Tom got a really significant question from someone who watched it. His question was this: “How would I go about determining what me as President and my Director of Operations would be paid in this market for a small business? We will finish 2022 somewhere around $600,000 in income with roughly 28% margins. Me, 1 full time and 2 part-time employees. Me as President and the 20% owner as Director of Operations?”