When it comes to running a business, there are a lot of things to consider.
You have to think about how much money you’re going to make, what kind of taxes you’ll have to pay, and whether or not you should outsource some tasks that aren’t your core competency.
But one thing many business owners don’t think about enough is how much they should be paying themselves as an owner’s draw.
This is the amount of money that goes into your pocket each month (or quarter) as an owner of the company. It’s not considered a salary—it’s just the money that comes with being a shareholder in the company.
It can seem like a hard thing to calculate at first glance, but once you take some factors into consideration like your salary at other jobs and how much time you’re putting into this new venture on top of any other responsibilities you may have (like families), it becomes a lot easier!
Salary and owner’s draw are two things that can have a huge impact on your profits—and they’re often things that people don’t think about when they’re trying to get their bottom line in order. What does that mean? It means that if you’re not paying yourself enough, or if you’re paying yourself too much (or even worse: paying yourself too little) then it could be hurting your ability to make money for your company.
It’s important for anyone who owns a business to understand how salary and owner’s draw work in relation to their profit margins. The more money your company is making (and keeping), the better off it will be down the road!
The first thing to understand about your business’s books is that they are a key tool for improving your bottom line.
When you’re trying to grow your business, it’s important to be able to see how you’re spending money and where you can improve. Your books, including your financial statements and reports, can help you do that.
For example, if you’ve always been wary of outsourcing bookkeeping services because you’re worried about losing control over the process, consider this: when you outsource bookkeeping, you’ll have access not only to the information in your books but also to the expertise of an experienced bookkeeper who will help you make sense of it. You’ll get actionable recommendations that will help improve your bottom line.
Click on the link below to get a quote today.
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