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How to Pay Yourself Personally as an Entrepreneur
Let me guess, you’re still struggling with taking random amounts from your business to cover your personal expenses? You have yet to pay yourself as an entrepreneur, twice a month, consistent amounts, from your business?
Let me guess, you’ve been in business for a while and it’s affecting your confidence with how you’re managing your money? It’s also allowing imposter syndrome and doubt to creep in.
It’s so important to me that you are actually getting paid personally from your business, therefore, I am sharing how to do this!
Before I share these tips with you, this is why you SHOULD trust me.
I used to not get paid personally from my business because I didn’t know how to go about doing this. I thought my business needed to keep all of the money as I reinvested it to grow it more and many of my clients were in the exact same boat before they came to me. It’s the best feeling when you take your first paycheck and then your next one and your next one. This is especially important as an entrepreneur to have some sense of financial security.
I want you to know, you CAN reinvest back into your business to grow it and you should. However, you also need to have your personal expenses covered! It’s not one or the other. I want you to be able to do both! And I hope you want that too!
Once you’re making more in your business and, you want to have more of a structure around how to pay yourself as an entrepreneur, this is how to figure this out.
It starts with knowing your business finances as well as what you are making in gross revenue. Following this is net revenue which is what is remaining upon subtracting your expenses from your income.
The next thing is to take into account money for taxes. This is money you’ll be setting aside right now, so you already have it when it comes time to file your taxes.
Lastly, is figuring out what you actually need personally to pay yourself as an entrepreneur to cover your personal expenses.
Once you figure out what that monthly amount is for your personal expenses then divide by two.
Take All 3 Types of Expenses into Account:
- Fixed Expenses
- Day to Day Expenses
- Random and Non Recurring Expenses (such as travel, gifts, clothing, yearly fees, etc)
I prefer for entrepreneurs to be paid twice a month, for example, on the 1st and 15th or 30th and 15th. I prefer this because it is easier to manage your personal finances better when you’re paid twice a month instead of just once.
And then, you will do a transfer from your business chequing account, to your personal chequing account. This is called an “owner’s draw” where you are paying yourself.
Once your business grows to higher revenue amounts, then you might actually put yourself on payroll. This is something you would want to discuss more in depth with your accountant.
But, for now, these are the steps to figure out how to pay yourself personally from your business!
If you are feeling like you need more help with figuring out these numbers, reach out to me. I’m a financial coach and I help entrepreneurs to figure out what they actually need to get paid and , how to make it happen, all the time! I’d love to chat about how I can help you with this, you can book in for a free call to talk with me here.
Other Content You May Find Helpful:
Let’s Dive into the Mindset Aspect of Not Paying Yourself from Your Business
If you’re not taking a paycheck in your biz, this blog is for you! This will be the fire you need to make taking a paycheck a reality! I’m so passionate about entrepreneurs getting paid PERSONALLY in their biz so be prepared!
If you are an entrepreneur and you brag about *NOT* taking a paycheck from your business, you and me need to have a little chat. This is especially important if you’ve been in business for a while now and you’re making over $5000 a month.
When I talk to prospective clients and they gleefully tell me they aren’t paying themselves from their business- I get sad inside. Although they are thinking that I’m going to be giving them a hero cookie, that is not the case!
You went into business to help others.
But you also went into business to pay your damn bills.
And not just that, but to live a damn good life.
This means you actually need to have money in the bank.
Not just to invest into your business, but YOUUUUUU getting paid from your business and making it a priority to pay yourself as an entrepreneur.
If you aren’t being financially compensated personally from your business, you aren’t able to show up the way you want to.
Even though your business may be doing okay, you personally actually are not.
Unfortunately, there’s not enough room here for me to go into the connection between not being paid in your business, and entrepreneurial anxiety.
The other thing, you are taking random amounts from your business when you need it. Therefore, why don’t we just take it a step further and get you on a regular schedule to be paid from your business twice a month?!?
Don’t you feel that, by setting the intention and then following through by implementing paying yourself twice a month from your business, that you are making yourself an energetic match to earn even more in your business?!?
So let’s switch your mindset from wearing a “not paying yourself as a badge of honor” to you shouting from the rooftops with pride that you pay yourself twice a month. That is seriously NEXT level of financial abundance and you need to celebrate it!
I would LOVE to celebrate you taking your first “real” paycheck from your biz! Let me help you make it easy and stress free, getting to that point, book in for a free call with me!
And please share this with a biz bestie! Sharing is caring and not a lot of people are sharing this kind of information. Let’s all rise together!
If you want help with getting a handle on your personal finances so you can pay down debt and increase your savings, click here to read more about my Cash Flow Confidence program that helps you to do exactly that!
I Share a TON of Financial Tips on Instagram, join me there! @mandyythomas