Any entrepreneur knows that keeping up with expenses when you’ve just started out can be overwhelming. Not only do you have all the expenses you did in your personal capacity, but on top of that you now have to cover business expenses like accounting software, business insurance, website hosting, and more.
With all of these costs, should you be paying yourself a salary? Yes, absolutely.
You Need to Get By
You can’t live without an income, and withdrawing from the business whenever you need cash is quickly going to get you and your books in trouble. Administratively, it will become harder to keep up with money coming in and money going out.
You Are Worth what You Deserve
When you first start out it’s OK to pay yourself just enough to get by, but from the get-go, you should still work it into your plan to pay yourself the salary you deserve. Your salary can scale with the business.
You Need to have a Credit Record
At some point, whether in your business or personal life, you’ll need to take out some sort of credit. It could be a cellphone contract, vehicle finance, or a home loan. Lenders are less likely to give out credit to someone who doesn’t have a reliable income.
You Need the Motivation
If you’ve given up everything but the bare necessities, missed out on special occasions, and worked through the night more times than you can count, what is it all for if you’re not seeing the rewards? Aside from the financial difficulties, sustaining yourself without a salary can only last so long until you lose your motivation.
Remember, you’re the hardest working person in your business and you deserve to reap some of the rewards. You’d probably do just about anything to keep it afloat, but not paying yourself can be just as risky as withdrawing every cent of revenue for personal expenses. If you’re a start-up entrepreneur and are struggling to get by, you don’t have to go it alone. Business insurance not only protects against risks, but many insurers offer additional business assistance in the form of telephonic advice, access to important contracts, and networking opportunities to grow your business. Compare business cover quotes today and get the help you deserve.
Prices quoted are correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.