Simon Madziar
Simon Madziar
Balancing Your Paycheque with Business Growth: A Guide for Business Owners Being your own boss comes with many perks, including the freedom to set your own salary. However, this freedom also comes with responsibility. Finding the right balance between taking an adequate income and reinvesting profits for future growth can be challenging. This article explores key considerations to help you determine the right pay level for yourself as a business owner. Understanding Your Financial Landscape: The first step involves analysing your business's financial state. You need to ensure sufficient funds for operational costs, taxes, and essential expenses before considering your own income. Consulting with a financial advisor like Mahler Advisory can help you determine how much the business can realistically afford to pay you. Market Benchmarking: Consider the market value of your role. Research salaries for similar positions in your industry to get an idea of what others doing similar work earn. This information provides a helpful baseline for setting your own compensation. If you're significantly underpaid compared to the market, it might be time to explore ways to increase your business's profitability. Long-Term Growth vs. Immediate Income: While taking all profits as income might seem appealing, reinvesting some profits can lead to significant long-term growth and ultimately a higher income. Consider investing in strategic areas like advertising, website development, or new offerings. Additionally, hiring assistance for tasks that drain your time can free you up to focus on growth initiatives. Making Informed Decisions: Determining your own salary requires careful consideration of various factors. By understanding your business's financial capacity, benchmarking against the market, and evaluating the potential of reinvesting profits, you can make well-informed decisions that balance your personal needs with the long-term success of your business. Contact Mahler Advisory today to discuss how we can help you achieve your business goals and optimise your compensation strategy, or your bookkeeping and taxation needs
