Do entrepreneurs pay themselves from the business they own and run?
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Do entrepreneurs pay themselves from the business they own and run?
If you are talking about a new business, most often with micro to small businesses, its nothing until you get established. Zero. In fact, many people will go in the negative and use savings, retirement or credit to get the operation up and running. If you are making anything at all consider that a huge Blessing.
If you have employees, that means they have to be taken care of first. You get the leftovers. If not, you’re ship isn’t sailing anywhere. Payroll should be priority.
This really depends on the size of the startup and the capital available to the startup and if there are other shareholders in the company. If there is very little cash available it is quite common for founders not to draw a salary in cash especially in the beginning.
It is however vitally important that you keep record of your compensation package. You are entitled to this money and you should be compensated before the profit of an exit is shared between the remaining share holders.
Having said that it is important for a founder to get to a point where she pays herself a cash salary every month.