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Running your own business is tough. Making money is tough. But for the
start up, one of the toughest decisions you need to make is how, and
when, to pay yourself.

We have traditionally been taught that we need to keep straight books.
Sales, cost of goods, expenses, capital costs, rental and so on and so
forth. Heck, some of us even have salaries in the books from day one.

Most of us, unfortunately, forget that we, the boss, the owner,
DESERVES a salary too!

Does this give a clue as to how and when to pay yourself? The answer
is pretty straight forward to me: Always pay yourself first.

The reason is very simple, there is no business to run if you can't
keep yourself alive.

You can choose between these 2 options: Pay yourself the same
reasonable amount you are going pay yourself this month, next month
and the month after next and so forth. This figure will have to be
realistic, it should be enough pay your food, keep your shelter, the
basic necessities and maybe plus a little extravagant. Or set aside a
percentage, say, 15% for yourself and use the rest to pay off debt.
Never mind if after paying yourself that $3000 or 15%, there is not
enough to pay off everyone else. Again the reason is very simple, you
will work doubly hard to make sure you earn more to pamper yourself
more than to pay off others. It keeps you flowing with adrenalin.

Simple but not easy because there is always a tendency to forget to
pay yourself first, or there is a fear of accumulating too much debt.
Some people just cannot tolerate the thoughts of piling invoices and
the image of screaming debtors. It is especially so if your business
is going through a rough patch with money at an all time low. Still,
instill a discipline to pay yourself first. The old adage remains true
in this case: You cannot save others if you cannot save yourself.

Learn more about this author, Vivienne Quek.
Click here to send this author comments or questions.

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