Do you pay yourself a wage?

[Pink Pink Pink]

Hi guys,
I've been looking into working for myself for quite a while and want to open a salon but keep talking myself out of it because I'm too scared! LOL.
Anyway.... How do you make your money exactly? Do you pay yourself a wage or just use some of the profits??
It's confusing me as I've read on here somewhere that it's best not to pay yourself but how do you make wages if not???
I'm so confused-
PLEASE HELP!

 

[Enhanced-Barbie]

Im pretty sure that most business owners don't pay themselves in the first year or so, because the business simply can't afford to, and needs to recover from start up costs.

your comment about 'using some of the PROFITS'... I think you need to know that a new business is expected to run at a loss for the first 2 years give or take. So there will be no profits.

Don't forget, that it always looks worse on paper than it really is though.

But, im guessing that if you need the money to live on while building the business (ie you dont have a partner who can support you until the business is stable) paying a wage would be best.

If you are just going to grab what you need out of the takings, it would be too easy to grab a little more, and a little more etc. It would be easier to have a set amount which is calculated into your budget forcasts.

:hug:

 

[Pink Pink Pink]

I'm looking into buying an established salon. Owner is pregnant with 2nd child and hubby is away working a lot of the time.
Clients are there and salon runs at a profit at the moment after she pays herself and a part-time member of staff.
I would just work on my own to start with but my husband was made redundant in November and wasn't on the best wage to begin with anyway.
So if I didn't pay myself a wage then I just simply wouldn't earn? I know this sounds ridiculous but I just don't understand how else people could afford to live their lives without money from somewhere??

Ground please swallow me and my mashed potato brain!!!!!

 

[Enhanced-Barbie]

I'm looking into buying an established salon. Owner is pregnant with 2nd child and hubby is away working a lot of the time.
Clients are there and salon runs at a profit at the moment after she pays herself and a part-time member of staff.
I would just work on my own to start with but my husband was made redundant in November and wasn't on the best wage to begin with anyway.
So if I didn't pay myself a wage then I just simply wouldn't earn? I know this sounds ridiculous but I just don't understand how else people could afford to live their lives without money from somewhere??

Ground please swallow me and my mashed potato brain!!!!!

Sorry I presumed you wanted to open a new salon, because your first message said something about opening a salon.

Well if the business is already running at a profit, you would definately pay yourself.

You need to do a thorough business plan, and work out your financial forcasts. You need to do a lot of research on the business, work out how many clients they have, consider how many might leave due to change in management (it happens), work out whether there would be enough clients to warrent keeping the employee on (remember that an employee can mean more profit, or more problems).
You need to work out how much the business can realistically afford to pay you, and whether you can live on that amount.

Hope that is helpful to you.

 

[loubylou]

I am an example of someone who runs their own salon but does not take a wage,
i survive because i claim working tax credit,
you can phone the working tax credit people and they will work things out for you and give you an estimate on how much you could claim or you can go to their website and they have an online calculator where you can work it out yourself,
sorry i don't know the addy to give you a link but hth :hug:

 

[RedAdmiral]

So if I didn't pay myself a wage then I just simply wouldn't earn? I know this sounds ridiculous but I just don't understand how else people could afford to live their lives without money from somewhere??

Its great that the salon runs at a profit at the mo so be sure to see exactly what the current owner is doing and keep that going, ie dont go in and change the products etc.
Unfortunetly there maybe times when you cannot pay yourself and that is what being in business is all about - managing every aspect so you do make a profit. I've made a huge loss in my first year and didnt pay myself, that didnt mean I didnt have a ball last year AND I managed to get away on my teaching salary. If i only worked in the salon then my wages prob would have been 100 per week or so as its more important to make re-payments as quickly as poss then it is for me to go shopping. As a young couple with no kids -just a dog we dont have to spend very much and I cant explain exactly but it just works. Its hard but we get by.

I expect to break even next year and have repaid a bigger amount than agreed off my loan so the following year I can take a proper managers salary.

 

[kylieb]

Could you not work in a salon and then work for yourself on the side. Then when you have built your client base, venture out and work for yourself full time.
It may be hard work in the begining but it will all pay off in the end.
At least your job will give you a guaranteed wage for you to live on.
xxx

 

[Pink Pink Pink]

Could you not work in a salon and then work for yourself on the side.

I've been applying for jobs and sending CV's every week since the end of October. I have tried to do this but it's not happening.
I've always planned to go it alone, just a few years in the future.
I've got a 4 year old son and an 18 month old daughter who are growing fast and my hubby was made redundant 3-4 weeks after me.
Had quite a kick up the arse these last few weeks! lol.

Maybe he could work for me? I would like to be the boss at work as well as home! Ha Ha

 

[RedAdmiral]

If he's good looking this could work better than you think. In the beginning my Boyf was here as eye candy the women loved him he comes in the odd saturday.
I cannot believe you cannot get even one days work!!

 

[kylieb]

I've been applying for jobs and sending CV's every week since the end of October. I have tried to do this but it's not happening.
I've always planned to go it alone, just a few years in the future.
I've got a 4 year old son and an 18 month old daughter who are growing fast and my hubby was made redundant 3-4 weeks after me.
Had quite a kick up the arse these last few weeks! lol.

Maybe he could work for me? I would like to be the boss at work as well as home! Ha Ha

It's hard out there at the mo , there isnt any work around here either as all the salons are cutting back as there just isnt as many clients as there used to be.
Why dont you give it a go and post out some flyers and see how you get on. They dont have to be expensive, you could make them yourself. Or visit vista print and buy 250 business cards for about 3 quid.
Worth a go hun and something is always better than nothing!

Just make the hubby do all the house work lol xxx

 

[Nicolahayley]

I am an example of someone who runs their own salon but does not take a wage,
i survive because i claim working tax credit,
you can phone the working tax credit people and they will work things out for you and give you an estimate on how much you could claim or you can go to their website and they have an online calculator where you can work it out yourself,
sorry i don't know the addy to give you a link but hth :hug:

Can you clam working tax credits if you own your own salon!? I wasn't aware of that!


Nicola! Xxx

 

[MrsHBeauty]

I am also an example of an owner who doesn't take a wage.

Everything I make gets reinvested into the salon.

I only survive because of hubbies job and a little help from tax credits.

I am pregnant with my 4th child so things have to change. I will probably look to sell the salon it will make a good I come for a beauty therapist running and working it. Currently I pay 2 part time girls to cover all opening hours my wage bill is about £350 per week so that could be a nice wage for someone.

I may keep the salon but I don't think I want to sacrifice time with my new baby to focus on the salon so it will end up slipping which again I don't want.

Good luck! Ring the tax credits people they are really helpful.


Jemima

 

[surf girl]

Of course you can claim tax credits! I think it's so unfair people don't get told about this when they register as self employed! Anyone who works and is on a low income or zero income as it is when you open a salon, qualifies if you just ring the inland revenue they will talk you through the whole process, also martins money tips website has a calculator to check how much you'd be entitled to x

 

[a.gidman]

I own a salon, also pay myself a wage. Its my first year with running the salon and i have a very high profit which im rather proud to have achieved specially at the age of 24!!!

An established business in my opinion wouldnt be a problem to take out a regular wage within reason .

 

[LolliDolli]

This post was from 2009. I think the op may have made a decision by now lol


Laura xx

 

[LolliDolli]

Also I don't think everyone can claim working tax credits. Only if you have a kid or are over 25. So not me


Laura xx

 

[sallyyummymummy]

Anyone over the age of 16, working a certain number of hours on a low income can claim working tax credits. Always worth looking into!

Sent from my GT-I9300 using SalonGeek mobile app

 

[LolliDolli]

Anyone over the age of 16, working a certain number of hours on a low income can claim working tax credits. Always worth looking into!

Sent from my GT-I9300 using SalonGeek mobile app

Does it go on husbands income too?
I just know when he got laid off, I was earning about £800 a month, didn't even cover our bills, and we couldn't claim anything
Ridiculous really :/


Laura xx

 

[LolliDolli]

Ah so maybe it's on hours worked not just income? What if I went self employed working 40 hours a week but not earning much?

Sorry for all the questions, it's something I'm looking into and find it really interesting


Laura xx

 

[ch-ela]

Anyone over the age of 16, working a certain number of hours on a low income can claim working tax credits. Always worth looking into!

Sent from my GT-I9300 using SalonGeek mobile app

Do you have to have a child to get these? Are they for parents only?