Start Paying Yourself A Salary!
You need to pay yourself what you’re worth! Can I get an “amen”? Many entrepreneurs significantly undervalue their worth. How do I know this? They show it by not paying themselves a salary. This is no way to run a business. You’re cheating yourself out of reaping the rewards of intense labor. Once you recognize that you have to be in business to make money and keep a client, you should also realize that some of that money has to go back to you.
Don’t invest everything back in your business. It’s not realistic, and, even if it were, there’s no glory in doing it. You’ll need to reinvest enough to keep the business growing. But you also need to save some back and consistently pay yourself a salary. If you feel like you’re getting the leftovers, you probably are. And you deserve better.
Put this in perspective: would you continue to work long, strenuous hours and even overtime without a paycheck? Of course not! That would be insane. So why do you keep doing that to yourself? It’s nonsensical. Your business should not be different from any other. You have to pay yourself! Having your own business should give you financial freedom. You should get more than just dribs and drabs after you’ve paid all your expenses. It’s not enough to take an owner draw.
If you’ve never given yourself a salary before, now is the time to start. Don’t know how to do it? Here are some tips to keep you on the right path:
Document Your Salary
Your salary needs to be intentional. You should document it and add it as a line item in your budget—just as important as office rent or any of your other expenses. Your salary should never be an afterthought. But if you don’t write it down, that’s exactly what it will become. You deserve to be compensated for all your hard work. Make it a priority!
Put It Into Action
Maybe you always say you’re going to pay yourself. But my best guess is it never actually happens. Don’t just give yourself lip service. It’s one thing to say you’ll pay yourself, but it’s another to actually add $5,000 in your cash budget so you can make a direct deposit into your account every month. Could you imagine if your boss told you that you were going to get a paycheck but you never did? You definitely wouldn’t stay working for that boss. Plan your salary and put it into action!
Expect Ebbs and Flows
There are occasions when your pay may have to be less. Your employees’ salaries and your expenses have to come first. But if you don’t plan a dollar amount for your salary, it will always be less—the very last of your priorities.
It won’t always be perfect. There are ebbs and flows to any business’ income. Your revenue is like a heartbeat: when it’s working, it’s constantly going up and down. If your heartbeat is stagnant, its’ flatlining. That means your business is dead. So, start accepting the ups and down as a normal part of being an entrepreneur.
When you know to expect the low points, they’re not as stressful when they come along. You know that when you’re on a downward trend, you can get back up. And hopefully, over time, the peaks will become less steep, and the dips won’t be as frequent. You know you’ll have ups and downs, and you’ll be able to plan your salary accordingly.
Reap The Rewards of Your Business
My client Karen understands the importance of giving herself a salary. When I met Karen, she had worked tirelessly around the clock for years. She consistently invested everything she made back into her business. With my team’s help, she increased her sales by 3000%! But, even after this major increased, I noticed that she didn’t seem very happy. So, I asked her about it.
She told me that she’d been working hard for so long, but she’d never received a paycheck. I understood why she was so frustrated. She had invested everything she had—her time, energy, and profits—into her business but wasn’t getting to experience the profits. We had to plan together to put her salary in her budget. She could finally feel the value of all the hard work she’d accomplished.
Drawing a Salary Motivates Your Work
Staying in a place of complacency and resignation will affect sales and morale. By putting together a strategy to reward Karen, she worked even harder. Karen was able to take money that her business was spending on household needs and reallocate it to her salary. By giving herself a paycheck, Karen could measure her contribution to her business. Seeing that money get deposited into her account month after month made her feel a sense of pride for all she had accomplished.
Is there a salary item in your budget for yourself? You’re worthy of a paycheck! So, put your budget together and don’t forget about yourself. Leave me a comment down below telling me how you’re going to start giving yourself a salary. I can’t wait to hear from you!
Your Partner in Prosperity,
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