How to Pay Yourself in Your Business

Let’s talk about the P-word. Actually, we have TWO P's to talk about: Profit and Paying yourself. Let's get down to brass tacks: 

I often hear "we don't need my income" as the #1 reason entrepreneurs don't pay themselves. Tough love? This mentality enables you to let your biz continue on as a money-suck. I know because I've been there myself.

And in the middle of this crisis, this idea is coming home to roost. With lay-offs, partnered households are seeing the loss of primary income and oh f*ck oh f*ck oh f*ck is becoming our collective refrain. 

I get it. My hubs just took a 20% pay-cut and we see a furlough coming (also truth: we're privileged AF and in the best scenario for this particular shit storm). 

Now more than ever I thank my lucky stars I changed the way I operate my biz to consistently pay myself. 

How'd I do it? I read the book Profit First.

Everyone and their dog had told me about it but I was like, "nah I'm good thanks." I finally caved last year and oh mah gerd. My only regret is not reading it sooner. 

I implemented the Profit First model (took half an hour to set-up and I did it in my jammies) and it changed my life overnight. Literally. I was able to start paying myself the next day. The genius of Profit First is in its simplicity + the fact that it flips the script on traditional accounting which looks like this:

sales - expenses = profit

^ this is how most of us are taught to do things. But what if you did this instead:

sales - profit = expenses

I'll let you get the book (it's an easy read but if you're really skeptical / don't have the time, you can download the free Profit First overview + one sheet here (don't have to sign up for anything)) for all the deets but the gist is this:

for every sale you set aside a percentage for: profit (you can keep this as small as 1%), paying yourself, taxes and --notice this is last!-- operating expenses. 

Listen. I totally understand if right now you just wanna be swallowed up by your sofa while eating cookie dough instead of straightening out your biz finances (confession: a couple weeks ago at the grocery store, I totally bought the double size roll of Pillsbury because I figured, "welp. if the end is nigh, I'm going out eating cookie dough.") 

But think of it this way: if you're the entrepreneur in the house you have an opportunity in front of you.

While traditional blue and white collar jobs are going buh-byeeee you have the gift of being nimble, adaptable and able to pivot. Getting your money house in order and learning how to pay yourself NOW is the first step in helping you weather this storm and those in the future.