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Discussion in 'Business Operations' started by IndyPropertyCare, Nov 7, 2003.
Who pays themselves a salary and who takes an owners draw ?
Draw based on total income each month...and yes, I only take one check a month.
Weekly salary then quarterly bonus based on profit.
A good salary. All other profit goes in the business account, because i need new equipment.
I'm also solo.
Good salary, and the rest is put up for next years purchases and marketing. I had 40 a week solo this year, worked 3 days a week. Next year I'm doing 120-150 residentials, plus 6 apartment conplexs. YEEE-HAAA!
Well this is my second major year and next year is the big one.
I have paid off all of my equiptment and am pondering going full scale lawn boy next year. I have a good full time job and go to school. I do this on the side with about 20 lawns a week. I have almost every thing except a 36" and a 52" but have money in the bank from mowing to buy those out right, and it is all paid for (except the truck). I have not taken a dime yet but since every thing will be paid for next year I can make (hopefully) a good living minus the usual expences.
Other than that I have taken maybe 200 worth of draws for food and drinks while out mowing and such.
Nothing as well.....I am part-time also. When I do go full-time, I like the idea of being paid a salary, then yearly bonus based on profits.
I Pay myself one check a month based on what the business netted for that month.....obviously I have a minimum amount so that I have enough to pay all my personal bills and live. At the end of each year I also Take a large owner draw to get me through the winter and for some goodies
If you are asking this in order to base your own decision then make sure you consult an accountant.
I am not incorporated therefore any money in is owner's.
If i was incorporated i would pay myself a salary equal to what i believe the company will profit in a given year. This alows that money to be taxed only once. If owners equity is built up then that money is taxed as capital gains and then again as personal income. Hence the double taxation.