How much did you pay yourself your first full time season?

Conversation
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Hi guys,

I’m going to be transitioning to running my business full time next summer and wanted to have a Conversation about paying yourself.

How much in your first year did you draw out of your company? I know my business will be paying for a lot of my day to day activities and my bills I’d personally be paying for, phone, driving ect. So I don’t think I’ll need to draw as much.

For reference currently I make $48,000 after taxes here in Ontario and was ball parking that I could probably only get paid $30,000 when working through my business full time.

Thanks!

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Well, I know here in the US we have LLC’s and S-Corp’s. As an LLC I don’t have to give myself a ‘salary’, just pay bills as normal and deduct business expenses on taxes.

How are you planning to structure your company?

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I didn’t have a real structure for paying myself when I first started. Then I got a hold of “Profit First” and got myself organized and comfortable with I distribute my income - both business and personal.

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I’m in Canada and it is set up as an corporation.

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All of it.
A few years later the tax man came looking for their cut plus interest.
Don’t do what I did lol

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I started with that system and I have attributed the success I have had so far because of it. That way of thinking bleeds over into personal finance too.

I try not to take out loans if I don’t NEED to.

His other book Pumpkin Plan is good too. Money well spent.

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I’ll have to look into those books as they might help me out!

I’ve decided to basically take What I make now (after taxes) and deduct what my business will be paying for instead of me. Ex. Truck, phone bill, insurance.

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Take your weekly income and break it down into percentages a couple of different ways and see what works best for you.

Something else to look at -
Go back to your last full quarter and list out of your income all of your expenditures under a given title.
Example:
Business Profit %
Owner Pay % (Give yourself a little something)
Payroll % (Your salary is included in that)
Operating material %
Tax %
Marketing %
Savings %
Have all of that individually breakdown to equal 100%.

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My goal last winter was to practice Profit First for this year. I even started the 5 bank accounts (3 checking, 2 savings), but never did anything with it. I need to this year! Trying to get motivated.

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I modified it for me. I use the one bank, 2 accounts - Business and Personal with 1 savings. I’m thinking now that I am used to breaking the earnings into categories I may do 2 Banks this coming year.
It is a discipline to allocate funds around where they need to be. Some weeks are very profitable during my season, and some weeks are lean during the slow season (about 4 months). Every summer is slow, so there is money available to draw from during those slow times as it got socked away in the very profitable time of the year.

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If I recall ( 23 years ago ) I probably took 25k

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$18K gross wages. I was a W-2 wage earning employee of my S-Corp. My first year there were no dividends for the shareholder (me) because I was reinvesting in the business; getting a WFP and equipment upgrades, advertising, etc.