Whether you have your own business or running a small agency, it can be tough for you to determine how much you should pay for yourself. You certainly do not want to be paid a lot, eventually making your cash flow suffer, but you also do not want to underpay yourself and not be able to manage your utility bills even.
The reason you have become your own boss is likely because you wanted to generate enough income so that you stop worrying about finances and focus more on doing what you love the most.
However, the financial system is based on trading money for goods and services. So how much money is too much, what is considered as little? Can you create a balance with getting paid what are you actually worthy of while still being able to turn a profit?
Determine Your Starting Salary
What should be the starting entrepreneur’s salary? There are different perspectives on this, but eventually, it comes down to the type of venture you are running and your perception as an entrepreneur.
Do take into account the following aspects before deciding upon on an entrepreneur’s salary:
Level of Experience
Are you a seasoned entrepreneur or someone new to the niche? How much experience do you have, what are your qualifications, and how much you have invested in your career are some of the vital aspects that help determine an entrepreneur’s salary.
Which Industry are You Focusing On?
What sort of venture are you running and how does it compare to the rest of the industry? Tech ventures are being able to keep their overhead costs low, leaving more room for larger entrepreneur’s salary. Service-based ventures can also afford to pay a higher amount if they consider applying the bootstrapping method.
What Do You Have In Mind?
Some of the entrepreneurs prefer running a business without making use of debt products, whereas others perhaps be open to loans or other investors. The owner’s salary decision should be based on your personal beliefs and what they are most comfortable with.
What Stage Is Your Business At?
How long since your business has been in operation? If it is relatively new, you perhaps not be able to pay yourself a bigger salary or maybe no salary at all. However, if your business has been quite old, it perhaps be able to allow the entrepreneur to a larger salary amount, and perhaps even want to keep it growing.