When did you start paying yourself?

[pure]

and at what percentage of your income? (If thats not too nosy a question!!)

I am fortunate that I haven't had to borrow in order to train or buy supplies, however the time has come to seriously start earning some money.

I just can't see that as well as replenishing supplies that I'll be able to pay myself much at all to begin with. And how do I decide how much I should get?

This whole setting up your own business isn't half as easy as I thought it would be.

 

[blossom]

If it helps hun, I broke even after 8 months. . .

 

[Chameleon]

It took me nearly 18 months or so but then i did invest in alot and bought a salon.

Be realistic with your goals Debbie,and have confidence in yourself!

 

[Bagpuss]

from day 1 i started to pay myself something....the first set of nails i did i kept £5...the rest went into a tin. (for stock and bills)

I still do the same now...i take a % for my wages and the rest goes in a tin...i think its important to pay yourself something...it makes it all more worthwhile.

 

[naturalnails]

When I started, I "borrowed" money from our savings to pay for setting up etc. I paid that back on a regular basis until it was all paid, including interest.

I decided how much I wanted to earn as an hourly rate and then worked out how long each treatment took me and paid myself a certain amount for a manicure, full set, or maintenance.

 

[extensionten]

how funny!

just did my tax return... well after being s/emp for 2 yrs I actually didn't make a loss. HOWEVER, If I dared to divide the very small amount I made by the hours put in - well lets just say you wouldn't work for anyone else for it! LOL.

By the time you've covered your supplies, stock, investment in training and equipment, advertising etc etc it takes a LONG time to pay this back before the money is "yours" (and the tax mans).

I do intend on making money this year!!! oh yes.

 

[Vetty]

I don't formally pay myself anything! I have a business bank account that has to have enough in it to cover expenses (stock, advertising, training, etc), but as I get paid in cash I tend to only bank cheques and use the cash to buy my household shopping and stuff like that. It seems silly to bank it and then draw it out again!!!

So I do receive money from my work, but as long as my business account is healthy the rest is spent on the family living.....

 

[Ruby19]

The best advice I can give is to have a budget. Make a note of all your expected outgoings including anything you need to spend on stock. Then work out what you expect to turn over on a weekly basis and work out your anticipated annual turnover. Deduct your outgoings from this and this will give you your gross profit for the year. From this figure you can decide what to pay yourself but remember to keep a little to one side for the tax man in case you exceed the tax limits (hopefully you will).

If you have anything leftover then this is classed as your net profit and you can either leave it to invest in the business or draw it out as a lump sum and go and have a well earned holiday!!

There is nothing to stop you taking whatever you want out to pay yourself but be realistic. You don't want to overpay yourself and find out at the end of the year you are showing a massive loss because of your salary. The taxman will also have a field day.

As you business develops over the years you will get a better feel for how much to pay yourself especially once the outgoings settle down.

Hope this helps a little

 

[pure]

Thanks everyone for your answers but from reading them it just shows that there are so many different ways of looking at it.

I think I will see how the first couple of months go and then look at the figures.

But I sure as heck didn't go through all the studying to make no money!! :lol:

 

[jo-from-moorspa]

I don't formally pay myself anything! I have a business bank account that has to have enough in it to cover expenses (stock, advertising, training, etc), but as I get paid in cash I tend to only bank cheques and use the cash to buy my household shopping and stuff like that. It seems silly to bank it and then draw it out again!!!

So I do receive money from my work, but as long as my business account is healthy the rest is spent on the family living.....

However if the tax man is looking of course I don't do that

 

[jo-from-moorspa]

Debs

I guess this is the geeky answer. Try and know what your break even is, for this you need to know your fixed costs (costs you have to pay no matter what) cost of premises, power/heat, rates, water, insurances. Under this you can put staff (excluding yourself).

Then you have your variable costs this is related to how many clients you see and what it costs to service each one (treatment costs). This can be a bit of a nightmare to work out as different treatments cost different amounts. Don't get too hung up on being penny perfect just have a good idea with a little contingency.

When you know that, it gives you an idea of your profit or loss you are making. If you are in profit take 20% off the figure for corporation tax (times it by 0.8) and that will leave you with the money that you can take, your dividend.

Jo
Beauty products | Beauty Therapy | Professional Treatments | Beauty Supplies- Moorspa.co.uk

 

[bombini]

I have been self-employed over a year now and im still not actually paying myself a wage ! Everything I earn goes back into the business. I live at home with parents so no rent but my life is generally funded by the bank & savings !

I could pay myself a wage but it would mean i wouldn't be able to take on new treatments, buy new bits and pieces etc etc. Im also paying off my skincare range at the moment which as you know cost megabucks so i will be skint for a little while longer :cry:

 

[pinkaholic]

hmmm mildly worried that all you tech's are not disclosing your income:irked:
be carefull this is not good :irked:

 

[jenny2]

before you pay tax you can earn about 4600, so for you part timers you can still declare your income and claim your family taxes:lol:

 

[Vetty]

I don't formally pay myself anything! I have a business bank account that has to have enough in it to cover expenses (stock, advertising, training, etc), but as I get paid in cash I tend to only bank cheques and use the cash to buy my household shopping and stuff like that. It seems silly to bank it and then draw it out again!!!

So I do receive money from my work, but as long as my business account is healthy the rest is spent on the family living.....

However if the tax man is looking of course I don't do that

hmmm mildly worried that all you tech's are not disclosing your income:irked:
be carefull this is not good :irked:

You mis-understand me! All my income and expenses are recorded on my accounts spreadsheet, I just don't formally bank every penny I take and then withdraw the same money from the account to spend.....

So, if in a day I have 5 clients and 3 pay me in cash and 2 by cheque I will declare the £100 (for example) on my accounts but only physically pay £40 into the bank. The £60 cash gets spent on family living.

I'm completely above board for the tax-man....... Does that make it clearer??