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Business

Gary Spagnoli
Gary Spagnoli
9,668 Points
Posted by Gary Spagnoli
Gary Spagnoli
9,668 Points

How to pay myself?

Hey guys.

I own a web design and web marketing business and I'm trying to get better at the "business operations" aspect of the company as it continues to grow. I'm structured as an S Corp/

Main thing I'm curious about is how to pay myself out regularly. In the past I've done it project by project. After I covered my monthly expenses, I would just send myself a check with a portion of the profit. A $2k project, I usually only took out $1000-1250 to pay myself.

Now, I have more consistent revenue. I want to implement a system that just sends me a check every month / direct deposits into my personal account. And just a percentage of the cash flow that the company is taking on.

Is this possible? Or should I be setting myself up on payroll? Do I set myself a salary essentially?

Thanks for your help! -gary

5 Answers

Eduado Aguilera
Eduado Aguilera
1,458 Points
Eduado Aguilera
Eduado Aguilera
1,458 Points

I don't know a lot of business but if I were you, I would set a precentage of the profit and take to account to save it, and with the other part of the money you can take your girl to a fancy dinner :)

Gary Spagnoli
Gary Spagnoli
9,668 Points
Gary Spagnoli
Gary Spagnoli
9,668 Points

Yeah. That's how I've done it in the past. But I have a couple clients on SEO/PPC management contracts. And most are only paying me about 250 - $500 a month. It's no longer project by project. I wonder if I should be setting myself up for salary, or if I should just keep doing the percentages.

Eduado Aguilera
Eduado Aguilera
1,458 Points
Eduado Aguilera
Eduado Aguilera
1,458 Points

Mmmm it depends on how many you want to spend. I'll go for setting you up a salary so you can have stability.

P.D. Did you get all your knowledge here in Treehouse or you are just expanding your skills?

Gary Spagnoli
Gary Spagnoli
9,668 Points
Gary Spagnoli
Gary Spagnoli
9,668 Points

This is primarily used to expand on my skills, and really because I'm interested in the Team Treehouse model. I dig the forums, the video sessions, tracks, etc...

I'll look into setting up a salary, although it will be a small one.

Nick Stellato
seal-mask
.a{fill-rule:evenodd;}techdegree
Nick Stellato
Front End Web Development Techdegree Student 33,994 Points
Nick Stellato
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Nick Stellato
Front End Web Development Techdegree Student 33,994 Points

Gary

In my opinion, the best way to set up a salary structure for owners is to keep the salary as low as possible. Find a number that you can reach every month without missing. Then pay yourself a bonus that is a percentage of the profits. The bonus can be paid out whenever you see fit. My suggestion would be no more frequent than once a quarter and no longer than once a year.

Taking this approach will give you maximum flexibility. If you want to take time off, you can still pay yourself monthly with the money your company has in reserves (the runway).

The beauty of it all is that you are the owner. You make the decisions. You can decide to do whatever you want.