Common questions that come up with coaching clients are:
- How do I pay myself?
- How much should I pay myself?
- If I make extra money should I pay myself more or save it in the business?
In fact, another gym owner that I’m in a mastermind with recently asked the third question.
While the answer to these 3 questions can be complex, I’m just going to give some simple answers and knock them out one at a time.
As far as the first question, here are my suggestions. Keep your personal and business finances completely separate. Pay yourself first as soon as you can. If you are a startup and aren’t paying yourself at all or not enough, I can see that. However, if you’ve been in business for more than 6 months and aren’t paying yourself first and/or consistently, don’t ignore this. While money may not be your biggest motivator, if you don’t pay yourself you won’t last.
For # 2, here are a couple of ways to look at it. You can pay yourself what you would pay someone else to do your job. Let’s say you’re doing most of the training at your facility and are doing 25 hours per week and 15 hours of administrative work. How much would you pay someone else to do that work? The other option is to pay yourself what you need to live as a bare minimum. I’d recommend keeping things pretty lean at least until things take off a bit.
And finally here’s the deal for #3. The good news is that it’s your business so you get to decide. If you want to take it all as a bonus check, go for it. However, if you’re looking to grow things down the road, you’ll need capital so you’ll want to save some. This is assuming you have some sort of emergency cushion,. You also might decide to be generous with some of the extra. This may include profit sharing for your team, gifts, etc. Afterall, they’re taking care of your clients!