How and how much do you pay yourself

[NS2013]

Still new to the business. Was wondering how and how much do you guys pay yourself?

Do you just write yourself a check every month? Do you have someone doing your payroll for you?

How much do you pay yourself? Is it a flat rate every month or it is different from month to month?

Is there a certain percentage your pay yourself from your company's profits.

Any help would be much appreciated.

Thank you

 

[Todd the Cleaner]

Depending on your book keeping skills it may be worth using a payroll service. I'm in the process of setting up with Square payroll right now and will begin using the service may 1. It only costs $20 a month plus $5 per employee and they do all the tax withholding and filing for you.

I pay myself on commission. What your pay should be depends a lot on your costs of doing business and how much you are bringing in so the amount is different for everyone. I have found using the commission option to be best for me so my pay depends on how busy I am.

 

[Avdo]

Im in the same boat. Im trying to figure out what should I be paying myself. My company is set up as a S Corp. Majority of my work is janitorial. Any ideas

@Mike Krall

 

[[email protected]]

Same boat. As an S-Corp I have to pay myself a "reasonable" wage for the work I'm doing. I like Todd's method of pay based on commission, since it would vary based on how busy I am. I have to do a lot more reading before I make a decision though, then I'll budget for a sit-down with a CPA and make sure my thought process is right before I move forward. Either way I'll pass on whatever I learn & decide

 

[Mike Krall]

Depending on your book keeping skills it may be worth using a payroll service. I'm in the process of setting up with Square payroll right now and will begin using the service may 1. It only costs $20 a month plus $5 per employee and they do all the tax withholding and filing for you.

I pay myself on commission. What your pay should be depends a lot on your costs of doing business and how much you are bringing in so the amount is different for everyone. I have found using the commission option to be best for me so my pay depends on how busy I am.

How many employees do you have Todd? Paychex might be cheaper and you get access to their HR department, retirement funding/planning, and direct deposit.

I'm an LLC so I write myself a check. It's based on what the company makes, how much to reinvest, etc. If your a Corp you take regular pay checks.

Obviously iff your just starting out you don't want to take every red cent. The company needsx an operating budget.

 

[Avdo]

Same boat. As an S-Corp I have to pay myself a "reasonable" wage for the work I'm doing. I like Todd's method of pay based on commission, since it would vary based on how busy I am. I have to do a lot more reading before I make a decision though, then I'll budget for a sit-down with a CPA and make sure my thought process is right before I move forward. Either way I'll pass on whatever I learn & decide

I like Todds approach but not sure how would it work for janitorial.

 

[Avdo]

How many employees do you have Todd? Paychex might be cheaper and you get access to their HR department, retirement funding/planning, and direct deposit.

I'm an LLC so I write myself a check. It's based on what the company makes, how much to reinvest, etc. If your a Corp you take regular pay checks.

Obviously iff your just starting out you don't want to take every red cent. The company needsx an operating budget.

I'm about to drain this bit man lol

 

[[email protected]]

I like Todds approach but not sure how would it work for janitorial.

I'm thinking it would work the same no matter what service you are in. When you bid a job, you do so having already factored in how much you need to make on the job as profit. So set yourself a commission as a percent of the profit on each job. You just got to make sure that in the end your distributions don't exceed your commission, or the IRS will set their sights on you. At that point I guess you would either pay yourself a nice end of year Christmas bonus to boost your income above your distributions or purchase some new equipment to reduce the profit from which you would draw your distribution. Of course, I could be completely wrong here, so that is why I plan on doing a lot more reading and running my thoughts past a CPA before I set things in stone

 

[Mike Krall]

I'm thinking it would work the same no matter what service you are in. When you bid a job, you do so having already factored in how much you need to make on the job as profit. So set yourself a commission as a percent of the profit on each job. You just got to make sure that in the end your distributions don't exceed your commission, or the IRS will set their sights on you. At that point I guess you would either pay yourself a nice end of year Christmas bonus to boost your income above your distributions or purchase some new equipment to reduce the profit from which you would draw your distribution. Of course, I could be completely wrong here, so that is why I plan on doing a lot more reading and running my thoughts past a CPA before I set things in stone

Don't think carpet cleaning with its variable income scales the same way as janitorial with its fixed income.

I mean with janitorial you can pretty much pay yourself whatever is left at the end of the month and it should be the same the next month.

With carpet cleaning you income is going to vary month to month and be very different season to season.

 

[[email protected]]

Don't think carpet cleaning with its variable income scales the same way as janitorial with its fixed income.

I mean with janitorial you can pretty much pay yourself whatever is left at the end of the month and it should be the same the next month.

With carpet cleaning you income is going to vary month to month and be very different season to season.

Hopefully if you are growing your business, then your pay would be growing too assuming you are commission based. Of course a straight commission means that lulls in business like those experienced in carpet cleaning or any other seasonally affected service business can have a drastic effect on your income, so I would recommend planning for a lull and putting away enough money each paycheck to get you through the expected slow period. Worst case scenario is you didn't put enough away and you have to take a draw from the company to make up the difference. This is obviously not ideal since it relies on your company being profitable enough to draw from while limiting your ability to grow the business or pay for sudden expenses like breakdowns , so if things are getting tight it might be a better idea to just pound pavement until you are busy enough to pay the bills

 

[Sierra Clean Care]

I never pay myself....... The wife gets money, the kids get money, the banks get money, the nanny gets money, and any other institution that I owe..... I only get the change in the change jar for coffee...... Yup, that pretty much sums it up!!!!!!!!!
Jeff @ SCC

 

[Blazer GT]

I never pay myself....... The wife gets money, the kids get money, the banks get money, the nanny gets money, and any other institution that I owe..... I only get the change in the change jar for coffee...... Yup, that pretty much sums it up!!!!!!!!!
Jeff @ SCC

There are trade offs. I am single so I get to keep everything

 

[Jason Miller]

My wife has me on payroll. Think she pays me 18 bucks a hour or something like that. I gotta fill out a time card like everyone else...... dammit I need a raise

 

[Sierra Clean Care]

Don't get me wrong...... I'm very happy in my life...... Work hard, get to enjoy ALOT of great things..... My family, the place I live, and life in general...... I have access to a great ski hill 25 min. drive from my front door, Great Lakes, and beautiful scenery....... It's just in our society, some times it feels like the tail wagging the dog...... Hamster on the wheel...... Listen to me, we just hit the busy season, and I need a vacation already........
Jeff & SCC

 

[Todd the Cleaner]

How many employees do you have Todd? Paychex might be cheaper and you get access to their HR department, retirement funding/planning, and direct deposit.

I'm an LLC so I write myself a check. It's based on what the company makes, how much to reinvest, etc. If your a Corp you take regular pay checks.

Obviously iff your just starting out you don't want to take every red cent. The company needsx an operating budget.

Just me right now and while I'm a good carpet tech (at least I like to think I am) I'm not the best office manager. I thought I would start using the service and also add my wife as an employee so she has some income.

I'm just set up as a sole proprietor right now.

 

[Kipp]

You guys need to pay yourselves like a GM. Percentage of Net.

Or take a small salary and bonus yourself on the Net

You should have monthly P&L statements and review your expenses, ticket averages, and cash flow

Running your business off a Net number will protect your business from lulls, keep your cash flow healthy and position you for growth.

 

[[email protected]]

You guys need to pay yourselves like a GM. Percentage of Net.

Or take a small salary and bonus yourself on the Net

You should have monthly P&L statements and review your expenses, ticket averages, and cash flow

Running your business off a Net number will protect your business from lulls, keep your cash flow healthy and position you for growth.

That's basically what I was getting at. I guess commission was the wrong term Percent of Net is exactly what people need to be looking at. Pay yourself last. Take the time to put together a growth strategy and an emergency plan (repairs/replacements), then make sure your percentage doesn't dip into what you have allotted towards those plans. If my percentage isn't enough after everything is paid for and funded, then it's just an incentive to work harder for more accounts just like any other commissioned salesman

 

[Mike Krall]

That's basically what I was getting at. I guess commission was the wrong term Percent of Net is exactly what people need to be looking at. Pay yourself last. Take the time to put together a growth strategy and an emergency plan (repairs/replacements), then make sure your percentage doesn't dip into what you have allotted towards those plans. If my percentage isn't enough after everything is paid for and funded, then it's just an incentive to work harder for more accounts just like any other commissioned salesman

Yeah Steve you totally complicated it

Pay yourself first you mean?

 

[[email protected]]

I'm familiar with the pay yourself first concept and it worked well for me when I was employed at a company I didn't own, but as a business owner I'm more inclined to pay myself last. The way I've structured my concept, rapid growth is essential to achieving my 1,3 & 5yr goals, so I need to make sure I've properly funded my marketing and equipment budget which comes from my net. If I'm not making enough after everything is paid and funded, then I need to pound pavement until I have enough for myself. I have significantly cut my living expenses for my family and I, so what I need to take each month is relatively low.

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[Waxmaster janitorial]

I pay myself an hourly wage for every hour ive worked on jobs. Me and my lady both have timesheets and I pay myself $20.00 an hour and her $10.50 an hour.

I take care of the phone calls, customer service, product ordering, equipment upkeep and repair, marketing, taxes, deposits, business goals, account management, customer retention, etc.

She takes care of the books and helps on the jobs. Sometimes she is there with me when I bid and gives input because my time goals and time it takes for tasks are sometimes unrealistic. That and its nice to have a second set of eyes and guts. But sometimes she thinks one thing is impossible and I get to prove her wrong.

And I also run scheduling by her because shes in charge of the home schedule and she cooks all the food. lol

Plus folks like the husband and wife team thing.

Right now we do all the paperwork but the more accounts we get and the more complicated life is getting I see now that there is value in paying somebody else to do accounting and free up time to spend with family and take care of yourself.

Always working 17 hours a day is not a sustainable way to do long term business, but sometimes ya gotta do it to make ends meet. Ya know?

But here we are having our min wage go from $9.45 to eventually $13/15 an hour. So our prices will go up, and so will our pay .