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When Should You Start Paying Yourself? And How Much?
When Should You Start Paying Yourself And How Much - Cigno Business Solutions
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An employee usually lets the boss decide on how much he gets paid. But if you’re the boss who owns the business, how are you going to pay yourself?

Pay yourself a weekly wage rather than have the business income serve as your personal spending money. Maintaining separate bank accounts for business receipts and personal spending is also advisable.

A tip to earn extra income through interest, is to put your business earnings in a high-interest savings account. Transfer your revenue into this account and only draw a set amount to pay yourself.

What do bosses pay themselves?

Smart Company conducted an anonymous survey with 13 small businesses and startups of various sizes, on how and how much the owners start paying themselves. Here’s the result:

Business size: running for eight years, over $4 million turnover

Before: founders paid nothing

Start pay: eighteen months in, $70,000.

After three years that increased to ~$110,000

Today: $150,000

Business size: running for five years, $3 million turnover

Before: founders paid nothing

Start pay: two years in, tied to business profitability

Today: N/A

Business size: running for four years, over $1 million turnover

Before: nothing to start, $50 a week after three months in

Start pay: one year in, but only $250 a week

Today: a ‘normal’ salary

Business size: running for 10 years, $2 million turnover

Before: founders paid only out of profit

Start pay: two years in, around ~$40,000.

Today: still ~$40,000

Business size: running for six years, $500,000 turnover

Before: no salary

Start pay: six months in, around ~$20,000.

Today: now $40,000

Business size: running for four years

Before: no salary

Start pay: one year in, around ~$50,000. Only taken after closing a funding round

Today: $150,000

Business size: running for seven years, $4 million turnover

Before: $50,000 salary

Today: around $100,000, but unlikely to increase

Business size:running for six years, ~$17 million turnover

Before: started with $150,000 salary plus dividends

Today: $230,000 plus dividends, set to increase

Business size: running for six years, $20 million turnover

Before: no salary

Start pay: one year in, around ~$70,000 with super

Today: higher salary

Business size: running for two years

Before: nothing

Start pay: two years in

Today: lowest paid staff

Business size: running for six years, $4 million turnover,

Before: founders paid hourly wage from start of business

Start pay: never, founders still on hourly wage

Today: no salaries, each founder paid market hourly wages

Business size: running for three years, $2.5 million turnover,

Before: no salary

Start pay: six months in, around ~$70,000. Only taken after closing a funding round

Today: $150,000 and $50,000 worth of incentives

Business size: running for eight years, $30 million turnover

Before: no salary

Start pay: two years in, around ~$55,000.

Today: still ~$55,000

Notice that most business owners didn’t pay themselves until 1 or 2 years into their business.

Note: Live within your wage by setting a personal budget to avoid uncontrollable dipping into business receipts.

Cigno Business Solutions - Business Loans in Australia

Instant cash loans in Australia

If you’re running a small business or a startup, you can get an instant cash loan.

Instant cash loans for businesses in Australia are great for you if you:

  • don’t own any assets for collateral
  • don’t like to offering up security
  • need the money fast.

Cigno Business Solutions is accommodating to all applicants. What you’ll need for application are some contact details, a 90-day bank statement for your business, and a registered ABN.

It’s an easy process as it’s done online.

You’ll receive the funds within 2 hours once your application has been approved.

Apply now!

 

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