Vita's Tip In 10: Do You Pay Yourself A Salary?

Hello, hello, friend! Welcome back to another episode of Vita's Tip in 10. In our last episode, we delved into the intricacies of gross margin percentages and why they're pivotal for your window treatment business. Today, let's zoom in on a topic that's closely tied to your overall financial health – paying yourself. Yes, that's right! Grab a cup of coffee, get comfy, and let's chat about why setting a recurring salary for yourself is a game-changer.

As I have the privilege of coaching incredible businesses and business owners through my VIP Experience Program, I've noticed a common thread – not everyone pays themselves a salary. Now, I've been paying myself a salary for years, so it took me by surprise to learn that it's not a universal practice. And, if I reflect, I didn't start that way. In the beginning, I didn't pay myself a salary, partly because I was a newly minted proverbially broke entrepreneur, and also because it wasn't on my radar to treat my pay systematically, just like any other employee in a corporate setting. It's a bit ironic because one of the big reasons for starting the business was to replace a corporate income.

The salary I'm talking about isn't about those early days when funds are tight, and paying yourself might seem like a distant dream. I get it, and tough times are a part of the entrepreneurial journey. If you're in that phase, keep listening to this podcast, with episodes from LuAnn, Madeleine, and me, for tips on quickly getting your business up and running to the point where paying yourself becomes a reality. Today, though, I want to address those business owners who are, let's say, out of the habit of paying themselves.

It became apparent to me that some business owners opt for what's called an owner's draw. Now, technically, an owner's draw is simply withdrawing money from your business account and transferring it into your personal account. Sounds straightforward, right? The issue is that it's neither regular nor recurring, and the amounts can be inconsistent. Often, the mentality behind an owner's draw is, "Let me pay the bills and vendors, and whatever's left, I might transfer to my personal account based on how much I feel like."

Now, if you're here, I know you're not running your business as a hobby. You're here to run an organized, scalable, and profitable business. And if you're in the habit of taking a personal draw, my friend, that habit needs to end. I want more for you. I envision better for you.

What I'm advocating for is a regular, biweekly salary – a consistent payout based on the role you play in your business. Whether you're the founder, the fabricator, the head installer, or the window treatment specialist, every position in your typical window treatment business has a market rate salary associated with it. And I want you to pay yourself that salary. Make it a routine – biweekly, consistent, and predictable. Whether you're a solo proprietor, an LLC, or an S corp, the structure doesn't matter for this discussion. How you set up your pay is a conversation for you and your CPA, depending on your family situation and strategic business plan.

Regardless of your setup, what's crucial is not doing it haphazardly. Not one month on, next month off. Not $1,000 this month, $10,000 the next. Instead, I want you to pretend you're working for a separate entity – let's call it Debbie's Window Treatments or David's Best Installations. This company, though owned by you, is a living, breathing, dynamic entity that provides a service, and you have a role in it. Your role could be singular, wearing one hat, or multiple hats if you're a solopreneur.

For your role, I want you to have a consistent, regular, and predictable income. Pay yourself for the work you've performed just as you would expect working for any other business. There's something transformative that happens when you adopt this approach. I've experienced it, and I've heard it from others. When you set up your pay in a consistent and regular way, your mindset shifts. You start running your business like a true, serious business owner, not someone dabbling in a hobby or merely paying lip service to the idea of running a business. Your mind accepts that this is a real, living, breathing business, and it processes accordingly.

So, my goal and aspiration for you, my friend, is to have your business pay you a regular salary based on market rates. And if you're managing your business well – juggling those gross margins like a pro – and find yourself with some extra at the end of the year, go ahead, treat yourself to a bonus. At the very least, have that market-driven wage. Even if you start small, even if it's monthly instead of biweekly, start somewhere. It's better than doing it haphazardly.

And guess what? There's something magical in paying yourself in this structured way. It sends a message to the universe. It transforms your mindset, your heart, your psyche. Suddenly, you and your business are seen in a different light – a more serious, formal, business-like way.

That's a wrap for today's episode of Vita’s Tip in 10! I hope this dive into paying yourself has been enlightening. If you're hungry for more insights into mindset shifts, CEO strategies, or digital project management tools, I'm here to help.

Consider joining my Systems Driven Operations class at LuAnn University – registration opens this month! Alternatively, go for the VIP Experience, a two-day in-person intensive where I share all my systems for immediate implementation in your business. There are only a few spots left this year, and prices will be going up in 2024. If you've been contemplating this, now is the time to lock in the 2023 prices.

Reach out, and let's schedule a conversation. Meanwhile, I'll be working on my next episode of Vita’s Tip in 10. See you next Thursday, and remember, pay yourself like the true business owner you are. Thanks for tuning in!