1. Separate business money from your own
Use a separate account or at least a separate envelope for the business. Everything you sell goes in there, and only business expenses and your salary come out.
2. Calculate what the business really leaves
Add up the month's sales and subtract product costs and fixed expenses. What's left is profit, and your salary comes from that figure, not from sales.
3. Start with an amount the business can handle
A prudent reference is to take part of the profit and leave the rest to reinvest and for the unexpected.
- One part for your salary
- One part to restock and grow inventory
- One part for an emergency fund
4. Set a payday
Pay yourself every two weeks or every month, as if you were an employee. Avoid taking money 'just for now': those small withdrawals are what empty the cash box.
5. Record your withdrawals
If one day you need extra money, write it down as a salary advance and deduct it from the next payment.
6. Review your salary every quarter
If profit grew steadily for three months, you can raise it. If it dropped, adjust before going into debt.
7. Include your salary in the price
Your time is a cost. If your prices only cover the product, you're working for free. Review your margin so the business can pay you.
A fixed salary tells you the truth about your business: if it can pay you, you're on track; if not, you know exactly what to adjust.