by Natalia Jones

Created on: February 10, 2010

Not surprisingly, many new entrepreneurs find it difficult to set their own salary when they decide to start a home business. Although many people say that they want to work for more money and they are heading in the direction of starting their own business so they can do just that, when faced with the opportunity to decide what they should be paid, home business owners rarely ever step up and claim a high salary.

This of course is because they see the need to make sacrifices and when you are in the driver’s seat the road ahead is a lot clearer, not to mention you know you are in control.

But what method should be used to determine a salary range that is appropriate and affordable?

Home business owners can choose to go with one of two methods;

Be paid what they are worth

Be paid enough to survive

Home Business Owners May Choose to Earn What they are Worth

This is a perfectly acceptable and reasonable choice. Some would argue the merits of leaving a higher paying post for one that cannot match your current reward level and the logic here is that any business that is going to survive must be able to pay people what they are worth. Therefore the business plan needs to be airtight and the financial aspect must be under control from day one.

It is smart to build your desired salary into your business plan and then test its feasibility with this expense included. If the projected business sales and revenue appears to be able to support it you should have no problem feeling comfortable taking a comparable salary.

Home Business Owners May Choose to Be Paid Enough to Survive

This is the other extreme and the logic behind this is therefore also opposite to the discussion above. This path is likely to be chosen by the business owner who places a high value on personal freedom and becoming an entrepreneur. He is therefore willing to sacrifice financially to ensure that that dream is achieved.

This business owner understands that the business must be able to support itself within a realistic time frame and so an inferior salary is not looked upon as a permanent solution, but rather as a means to an end. By accepting a lower salary the entrepreneur gives the business some time to adjust and channels money into areas that have the potential to give a greater return on investment, such as advertising or product development.

The route you choose must come as a result of your personal philosophy and of course the capacity of your home business. It doesn’t make financial sense to put your business under strain to increase your salary, but it also isn’t smart to hang all your hopes on a weak plan that doesn’t have the potential to take off and eventually pay you what you are worth.

All business owners need to take a good look at their plans for the future to ensure that they can see getting to the point where they will be making what they are worth and possibly even more. 

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