Paying yourself?

[SCJeff]

Well as my new business grows ever and ever near to becoming more than just a dream, I'm still stuck on this one part. How do I pay myself and others while still having the business make money?

As I type this out, I'll spell out what I'm thinking as far as payments for employees and myself and get some feedback.

Without going into much detail. I basically offer a few different production type services that all coincide with each other. Each service is headed by what we'll call an "expert" which manages the section and does the work for (and way in the future, they will be in charge of hiring more help to further progress their section of the business, with my final say and interview of course). With any work they get they will take, what I have determined (as of now) to be 7%, out of the total amount earned which will go into the overall businesses account. They then in turn will take the other 93% and use it to further their own area of expertise (expenses, equipment, etc) and that is what they keep as payment. So it's more or less commissioned based. You do work, you make money; you find business, you make money. If you don't have any work or projects to do, your not making anything. Incentive for people to be proactive and get projects and work themselves.

I myself "head" a "section", so I will be working that way and managing my own aspect of the company while overseeing everyone else as well. The problem I'm finding though (and I don't want to sound like I'm being greedy) is I'm doing more than just managing my own section of expertise. I'm running the business, heading the marketing for everyone, finding projects for my experts to work on. Yet with the model I laid out I'm making the same amount of what my managers are. (again don't want to sound greedy, but if I'm doing more work, i think I deserve more pay).

I don't want to have to tap the "business account" to cover it, as that goes to covering costs for everyone and the business as a whole, not just myself.

Paying myself aside, are there any flaws with my idea of payment as of now?


Any help would be appreciated, any help brainstorming would be appreciated as well

thanks!

Jeff-

[BMX]

What is your business???

[StephenG]

It almost sounds as if you have too many gray areas. When first starting my business I used a combination of full time employees, part time employeees, outside contractors and commissioned employees. As a section grew I would decide if I wanted to incorporate it in as a full time aspect of the business and hire full time employees to take care of it. I certainly would not worry about being greedy. I paid my employees well, treated my customers fairly and made a guilt free healthy profit. The only issue I ever had with paying myself was wether or not I was leaving a sufficient amount in the business to sustain growth and development.

[SCJeff]

well as I said each section coincides with each other. It's necessary to have them all up and running and working together. All working out of the same building, if a customer comes in for a project with one person, we try to sell the other services to them as well. All which are necessary and applicable to the customers needs to function.

I know it sound vague, I'm just not comfortable discussing the actual business functions right now because it's something I've found that hasn't been done yet.


I did find some good articles that kind of helped me out with the pay though. Just taking my personal expenses and making sure I have enough to cover them, rent, food, car, etc.

[vgregory]

Having a help is not bad at all. And when you hire an employee be honest to them that you're a starting business.

[SCJeff]

Having a help is not bad at all. And when you hire an employee be honest to them that you're a starting business.

That's what I'm planning on doing. The basis of everything is more opportunity based than anything. That way for the people starting with me, it will feel more like their business as well because they are really helping build it up at the same time, with them having a lot of freedom of setting their own section up.

We'll kind of say the business would be like having, an electrician, plumber, welder, carpenter, all working out of the same building all for the same business. If you were building a house or something (might be a bad analogy lol) and you came into contract the carpenter, and you saw that we also had plumbing and electrical services you would be more likely to also contract through us with them.

Now going with that, we'll say I'm an electrician. I know how to manage a business, market the business, and set appointments for other people, the plumber, carpenter, etc...but I'm not a plumber, i'm not a carpenter. I would have other people with that expertise running that and doing that work.

Now in my particular niche. The different sections by themselves as businesses are struggling and have been for a few years. By combining them into one business we can potentially feed off of each others projects by selling the other services to them as well.

[joemark]

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[jrockfl]

It sounds like you currently are not running a business, but just speculating?
I'm the owner of my business and have a couple part time employees and couple people I pay on 1099.
You can pay yourself by taking draws, or even just paying yourself with a paycheck.

I just signed up with ADP and I will be leveraging their payroll services.
I pay myself the bare minimum because i use the money I make to reinvest back into the business.

[pandacover]

what do you sell?