When starting your own business, there will undoubtedly be surprises. One of those surprises could be related to your paycheck — or lack thereof.
After opening a business, most owners won’t pay themselves during the first year, said Kedma Ough, director of the Oregon Small Business Development Center Network. Many new owners are surprised when their profits are not high enough to support a salary that can fund their existing lifestyle.
“They are usually shocked when we are reviewing their personal financial statements, especially when they realize there is not a lot left for them to take as a salary,” Ough said.
Once you begin to turn a larger profit, you’ll be able to set aside some money for yourself. It’s crucial you pay yourself enough, not only to remain compliant in the eyes of the IRS, but also to reinforce your value as a business owner, Ough said. Even