Jay Goltz on about how much a small business owner should pay themselves. While I agree with the sentiment, I don’t think it’s as simple as paying yourself “whatever is left over.” To me, that’s only one factor. I think a small business owner should pay themselves based on a balance of the following factors:
1. How much profit (accrual basis, not cash basis) you generate – essentially what’s left over
2. Your partners, if any, and what you all contribute to the company
3. How much cash you’ll need for growth or a rainy day
How do you decide what to pay yourself?
