Pay Yourself FirstBy Richard Myrick, posted 02/21/19 13:54:06
Why Pay Yourself First?
Richard Myrick for mobile-cuisine.com
As a food vendor, you may assume you should put everything you make back into the business. Not so. The first thing you should do with your money is pay yourself, first. Many food business owners who bootstrapped their companies feel that paying themselves is a luxury; however, we feel (and will show you why) that it is a necessity to pay yourself first for the success of your food business.
Why You Deserve a Salary
If you’ve got a nice cushion of savings, you may not need a salary right now to pay your bills. But that could change, so it’s best to prepare for the day when your funds run out. Getting into the habit of paying yourself, even just a little bit, will give you money for personal expenses when things get tight or sales slow down. If your food business happens to fail one day, you would have gotten something for your efforts by paying yourself and saving money for that rainy day.
Giving yourself a salary can have tax benefits for certain business structures, as it will reduce your company’s profit. Talk to an accountant to find out what benefits your tax type (LLC, partnership, corporation) has with your salary.