FORUM WORKSHOP
Forum Workshop
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Consider your salary to be a “debt” the company must pay. Then pay yourself, like all
debts, as much as the company can afford in a
worst month, and pay your debt to yourself last.
When you start, your salary should be conservatively low, based on your income projections.
After your first year, you will know what your
worst month really is. (In retail, itʼs usually January and March. In service, December.) Donʼt
assume that next year sales will increase, so
you can pay yourself more. Wait until sales so
increase, in fact. Live as frugally as possible
until the business can afford to pay you and
your staff more. If reality
exceeds your projections, give yourself a
bonus on December
31st, after you have calculated your net profits
for the year. Since the IRS is going to tax you,
as a sole proprietor or a partnership, on whatʼs
left over anyway, this is the time to pay the business (capital) and pay yourself that bonus.
Take Time To Reassess
January 1st is a good time to look into the future, too. What is changing in your world? What
will it cost you to buy updated equipment or the
latest giftware inventory? Of course, income
you have earned from sales all year long has
bought new inventory and supplies. But what if
times have changed dramatically, and you have
to buy something that will enable you to continue to compete in the marketplace – like the
phototypesetting machines that kept Midnight
Oil Typesetting in business?
continued in next issue ...