how much should a begginer pay himself hourly?

Discussion in 'Business Operations' started by dustmow, Sep 4, 2002.

  1. dustmow

    dustmow LawnSite Member
    from zone 6
    Posts: 5

    as a begininnig landscape business starting out solo how much should the owner pay himself. just enough to get by and allow the rest to fall back into the business or live off your income and plan for future investments?.
     
  2. KenH

    KenH LawnSite Bronze Member
    from CT
    Posts: 1,622

    I think it more depends on how much you NEED to make to live comfortably. I might be able to live on 5$ per hour while Joe Blow needs to make 15$ per hour. I think you should see how it goes and adjust your wages accordingly until you find your comfort zone.
     
  3. Lawn Wizard

    Lawn Wizard LawnSite Member
    Posts: 99

    It would all depend on your personal situation. I would say keep putting the cash back into the business, until you reach a point where you are able to live at a level where your happy.
     
  4. $11 per hour. Put the rest back into the business.
     
  5. nu83

    nu83 LawnSite Member
    from omaha
    Posts: 238

    There is no set number that anyone can tell you to give yourself. How I did it was to pay all my bills and the rest put back into the business. Also, you need to put enough away if you can to get through the winter when income will be zero if unless you plow, and if you do plow it will be totally dependant on the weather.
     
  6. wojo23323

    wojo23323 LawnSite Senior Member
    Posts: 608

    When I retire from the Navy next June, I plan to pay myself $600 per week year-round. That is just to start. I hope to give myself a raise the following year.:)
     
  7. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,712

    Profit is something to be planned for, not something that happens by accident. Your wage is part of your operating costs. What could you make doibng the work for another company. You gotta get that much including benefits.

    Then you can't Forget all the selling, management and repair time where you are not out producing on the job. That is overhead, believe it or not. That has to be spread over your production hours.

    If you wouldn't do the work for free for somene else don't do it for free for your self.
     
  8. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Man, that's a tough question. And I am not quite THAT analytical to go and break down how much I paid myself in the beginning. Heck, I still don't even know how much I pay myself now. I just know that it is pretty decent because I can usually pay all the bills and still have plenty left over for fun, travel, etc.

    I basically always just paid all of the business expenses and then kept whatever was left over for myself. That's still the way I do it to this day. I know there are those who are much more analytical and figure out exactly how much to pay themselves each month, etc. But I could care less about being that anal. I figure I need to take care of all of my business expenses first then whatever is left is mine. Seems to work out real well so far.
     
  9. rkbrown

    rkbrown LawnSite Senior Member
    Posts: 533

    Wow, Jim:

    You've got it made !!! After I pay my business expenses, my wife figures the rest is hers !!! :D
     
  10. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,132

    I've been full time in my business since March of this year and haven't paid myself yet! All my income has gone for expenses and new equipment. My plan is to start paying myself $15/hour in another month or so, now that all my toys are paid for. Luckily I have other income and savings to fall back on. I would say to do as you suggested, put everything you can back into the business and take only what you absolutely need for now. I have an LLC and even when I start paying myself, I will not "employ" myself. If I do that, I will have to pay unemployment comp. and workmens comp. (both the employer and employee shares).
     

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