Cutting yourself a paycheck

December 8th, 2006

My dad is here from New York and I have to meet him downtown shortly. So this’ll just be a quickie.

I found this short but sweet article in NAFE Magazine, put out by the National Association for Female Executives, on how exactly to pay yourself when you’re a newbie entrepreneur with a growing business. Thought you’d want to see.

Here’s a teaser:

So you’ve started your own business and now the money’s rolling — or maybe just trickling — in. Now it’s time to start drawing a salary. But how much? Should you draw out what you need to cover your living expenses? What your growing company can afford? Or how about the pay you sacrificed to go solo?

Ideally, all three — and much more — will factor into your salary decision. While you may be willing to take a hefty drop in pay to get your business rolling, paying yourself far under market does both you and your business a disservice. “It’s not sustainable,” explains Peter Hupalo, author of Thinking Like an Entrepreneur. “You may be able to get by, but for how long? And it won’t look good to potential investors or buyers down the road.”

Helpful budgeting tips follow. If you’re working solo, or thinking of taking the plunge, check it out.

[Full disclosure: I have an article in this ish too, on how to ask for a raise, though you can't get to it online.]

Entry Filed under: She's the boss