By SueCanyon | August 8, 2007
You may find that I say this quite often, “You deserve to get paid!” Well you do, don’t you? I can’t tell you how many of my clients don’t take a paycheck from their small business. They say there are those who own a business and those who have merely purchased a job. Well, those who don’t take a paycheck don’t even qualify as having purchased a job. They’ve purchased a hobby. So you tell me, “But, I don’t have the cash flow built up yet to take a paycheck.”
Okay, maybe the business needs the cash more than you do. But take the check (on the books) and loan it back to the company. Pay the taxes on the earnings now, and set yourself up to get paid back farther down the road when you ARE making enough to do it. What I often find is that when you decide to sell the business or try to get a loan against, you can neither recover your ‘sweat equity’ nor prove to the bank that you really have invested a considerable sum in the business unless they can see it on the books.
I just had a client have to pay taxes on $600,000 that he ‘borrowed’ over some 18 years, while none of the offsetting money that he put into the business was accounted for. Don’t let this happen to you. Decide how much you should be making, and loan it back to the business if you like.
And unless you just LOVE working 60 hours or more a week, let’s start acting like we own a business rather than a hobby or a job. An owner doesn’t have to be there every day. Just think about that for a while. I’ll talk about this again later.
© Business is Booming! llc
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