The biggest owner pay mistake isn’t taking too much. It’s taking too little, with no math behind either number. Budget from the bottom up. What does the company need to be profitable? What are the expenses? What’s a healthy gross margin? Back into your number from there, and it stops being a guess.
@officialchadpetermanTranscript
The biggest mistake most owners make is not paying themselves too much, it's paying themselves too little. The most important thing to understand when you're thinking about what you should pay yourself as the owner of a business is working backwards. You should start budgeting from the bottom up, figure out how much money the company needs to make to be profitable, figure out what your expenses are, understand what a typical gross margin looks like, and then you can back into it. Too many people want to take all the money out of the business, only to wonder why six months down the road, they have no cash fueling the business. Work smarter, not harder.
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