Belk On Business

The context of pay we have with the client’s range depending on whether we are discussing the reasonableness of an owner’s salary, tax strategy or just a practical approach in the context of personal finances. In the context of determining if a business is profitable, many business owners pay themselves last or sometimes not at all. If this is the case, you don’t have a functional business. The owner’s pay isn’t a separate checking account or part of an accounting hack. It is a practical component of a business’s operating budget. Some items to consider when determining the salary amount: 1) What would it cost to replace your duties in the business? This isn’t the same as replacing you in the business as this would be a component of both salary and net income or profit. Determine what those duties are and look to other businesses as a point of comparison. Look to statistics as to what owner’s get paid in your type of business as compared to gross receipts and net income (usually ranges from 40-60% for most sm