Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
Featured Biz Question
As the owner and manager of my business, I contract all my labor and pay as I go a set fee per piece. (I design and manufacture clothes for breast-feeding women in a wholesale market and single orders.) I find it difficult to pay myself. I don't know what is realistic (currently 25% of sales). I have been asking around what is best in terms of taxes (so far no answer). I'm listed as an LLC and all profits flow through my income tax. Do most business owners pay themselves on the books or just take money as it comes in? How much do they leave to run the business and leave for further business investments within their company? Thanks, Stephanie
Answer from our Guest Expert Peter Hupalo of Hupalo Ltd.
Great question! You're not the only biz owner out there who's not sure how to pay yourself. Figuring out how to pay yourself largely depends upon your business structure. I see you're an LLC, but I'll also try to generalize my answer to cover the most common business structures to help you determine the best way to pay yourself from the business and to help others do the same. (When in doubt, however, it's best to consult your business accountant or business attorney.)
Your Business Structure Is a Big Piece of the Paying Yourself Puzzle
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About the Expert
Owner of HCM Publishing, Inc.
Peter investigates the latest computer-programming technologies and researches companies for investment. He also writes a column about entrepreneurship and small business for iSyndicate.com and reviews biz books. Peter wrote Thinking Like An Entrepreneur, about how to make savvy business decisions and take real control of your financial destiny. more