| When you are the owner of your own business, | | | | manager.Separate compensation into parts. The |
| one of the most difficult decisions you will | | | | first should be for showing up (basic |
| make is how to pay yourself and how much to | | | | salary). The second for perks to clear away |
| pay yourself. First, there is the issue of | | | | the static that can prohibit performance |
| adequate cash. If you are doing things on a | | | | (some clubs memberships do put you in contact |
| shoestring, you may not have enough money to | | | | with business prospects), and the last, a |
| pay yourself. Suppose that you do, but it | | | | bonus based on some combination of increased |
| will be a struggle. You might opt to pay | | | | sales (just a small piece) to increasing |
| yourself but to not run the pay through all | | | | profits (a bigger piece) and making the |
| of the deductions. In other words, you treat | | | | projections within say 5% (plus or minus).... |
| yourself as an independent contractor -- or | | | | the biggest piece.As for the other hat, the |
| maybe you just borrow enough money to meet | | | | one you as the manager wears, think about how |
| your monthly needs.On the other hand suppose | | | | you are going to improve the business and |
| you properly capitalized the business -- | | | | earn the bonus you will be paying yourself. |
| either with your own money, investor money or | | | | Constantly focus on making the business |
| bank loans. In this case you can pay yourself | | | | better. Develop the fear that there is |
| and pay all of the associated payroll | | | | somebody out there who will be able to do |
| expenses. But how much do you pay yourself?In | | | | your job better than you and when that person |
| either situation, I suggest that you go back | | | | shows up -- you are going to have to defend |
| to the projections you made when you first | | | | your performance.Now back to wearing the |
| started looking at the business. In those | | | | owner's hat, hold yourself, as the manager, |
| projections, you included expenses for | | | | accountable for making the projections, keep |
| salaries and you had a number in those | | | | laying out bigger challenges for yourself as |
| projections for yourself. Or, you should | | | | the manager; keep raising the performance |
| have.What was it? How did you arrive at that | | | | bar. And keep a sharp eye out for that proven |
| number?One way would have been to consider | | | | performer who walks in and wants the job of |
| how much you wanted, how much you needed to | | | | running your business.When that happens, |
| live on. A second way would have been to come | | | | don't be afraid to fire yourself.Learn more |
| up with a figure based on what you were | | | | about this topic in Chapter Twenty-seven in |
| worth. If your last position was President of | | | | my book.By Art ConsoliEntrepreneurs Pay |
| a multi-national corporation, and you were | | | | Themselves What They are Worth -- number |
| paid a million dollars a year -- then that's | | | | seventeen in a series taken from:How to |
| what you are worth. Right? A third way would | | | | Evaluate and Profit from a Business |
| have been to establish a salary based on what | | | | Opportunity - The Entrepreneur's GuideBy Art |
| the going rate is for a person to do the job | | | | ConsoliArt Consoli held eight corporate |
| in a business similar to the one you now own. | | | | positions with Johnson & Johnson before |
| Industry statistics are available and this | | | | starting his first business. He went on to |
| amount should be fairly easy to determine.But | | | | build over twenty businesses from patents or |
| you bought or started this business because | | | | ideas or from businesses others couldn't make |
| there were things you and you alone were | | | | successful. These ranged from starting a |
| going to do to make it an incredible success. | | | | veterinarian drug company to taking over a |
| You could never find a person who would be | | | | steel fabricating company to developing the |
| able to do what you have the vision to see | | | | first manufactured home subdivision to |
| and to accomplish. You can easily convince | | | | qualify for every private and government |
| yourself that you are worth more that the | | | | assisted mortgage program in Arizona. He also |
| industry average.And last, since you own the | | | | did ten workouts for lenders and owners; the |
| business, (without investors for this | | | | last was a $30 million, 300 employee, |
| example) you might feel that you are entitled | | | | precision parts manufacturing plant that made |
| to everything that is left, and you could | | | | parts for the auto industry. Consoli's unique |
| just ignore the fine lines between salary, | | | | background and skills allow him to speak and |
| perks, bonus and distribution of profits.I | | | | write about how someone with limited |
| may be in the minority here, but I suggest | | | | experience can do a self-evaluation which |
| that if you are serious about business and | | | | will let him decide which business |
| about making what you bought or started into | | | | opportunity is best, how to evaluate |
| a successful business -- treat it like a | | | | opportunities and gain control over the one |
| business and run it as a professional manager | | | | which offers the greatest potential and then |
| would. In fact, go to the point of wearing | | | | manage that business to success. Readers of |
| two hats -- a manager and the owner. While | | | | his book call and write to tell him how much |
| wearing the owner's hat decide how to pay | | | | his book has helped their lives and improved |
| yourself while thinking about how you would | | | | their business. |
| hire and pay a well-qualified professional | | | | |