How do you pay yourself?

[kexwolf]

Hi,

Im a new member here and joined to see if I can share/get a few ideas on the most tricky question of all - How much do you pay yourself?

A partner and me are involved in acquiring industrial real estate. We have a very rigid - yet flexible - business plan and a strategy plan also put in place.

We all know that we get paid for our investment when the company makes money. BUT, is there a method in determining the pay figure. One cannot just say "Im gonna pay myself 250k when my compnay turns out a profit:. YOu know what i mean ?

Anyone's ideas would be welcome.

Kexwolf

[BusinessAdviser]

My suggestion?

Until you have the business positioned where you are happy with it, you ONLY take out money necessary to live on. End of story.

However, I'm sure you might get a different opinion of others here.

The important thing to remember, as you're getting everyone's two cents, is that there is no magic number or percentage. The decision should be based on a number of considerations that are unique to you - your living situation, your goals for the company, the state of the company, other investment opportunities, etc.

Good luck.

[jasaunders]

I agree with the previous comments, but want to add, that how you and your partner take money out of the company must be specified in any operating agreements you have. Otherwise, you are sure to have some disagreements about this down the road. You should make everything crystal clear up front between you and your partner, including your expectations of how much money you want to take out of the company.

[rogercbryan]

If you are serious about running a successful business you have to understand that you pay yourself last. This is extremely hard when you start out. There is often an inclination once your company starts making money to increase your standard of living. This all too often leads to a faltering company. As I agree with previous posters you need to have a solid plan on how you will get the money you need to live. If you are in real estate you may be able to factor in a payout to each deal. This is not my industry so I'm sure others will know better.