Frogger Why Frogs

How much should I pAy myself?

So one of the questions that we get asked a lot is?

How much should I be paying myself?

Like a lot of the questions we get asked, it depends. 🙁

The reason for that is, if you want to be making a million dollars a year, but you only earn $100,000 a year in your business, you obviously can’t pay yourself a million dollars a year. So the most important factor when we’re trying to figure out what we are going to pay ourselves is actually how much we want to be paying ourselves. The reason that that’s important is from when we have that number, we’re going to be able to back into how much revenue do we need to be generating in order to pay ourselves that.

Then, once we know what that is, we can actually look at, well, where are we today in terms of our revenue numbers and our expense ratios and how much can I pay myself. From there, there’s really only a couple levers that we can pull.

The first of those levers is going to be what are our expenses.

The next one is gonna be how do we increase revenue.

If we need to close the gap between our revenue number and our expense ratio, don’t we need to change our pricing model and raise our prices? So that’s kind of how we’re going to figure out how much should we be paying ourselves or do we want to be paying ourselves? And then ultimately get to a number of what can we pay ourselves today and how do we make a plan to get us to where we want to be?

Now, there’s kind of a secondary question there, which is what’s the actual mechanism by which you pay yourself? And we’ll make a separate video that goes over that a little bit.

1 thought on “How much should I pAy myself?”

  1. Pingback: How do I pAy myself? - Our Team Accounting

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