Many people start up with the intention to make their entrepreneurial businesses grow, make huge amount of income and maximize their profits. Most of them do succeed and achieve their goals/targets. Those are the rare individuals who thrive hard into doing something they’re truly passionate about and solely believe in themselves. The time, effort, compassion, drive, love and focus directed into their businesses have really been awarding for them towards the end.
But, have you ever wondered how those small business owners’ pays are? If they pay themselves or what? How much do they earn, little or plenty? Is it that rewarding or worth the sufferings, time and energy put into it? Those are the questions that are going to be answered as this progresses.
You might be interested in:What Is a Small Business?
How do Small Business Owners Pay Themselves?
Definition of small business
Firstly, you’ve got to understand and fully grasp the meaning of small business. It is actually pretty simple. According to researches and documents on the internet, small business is an independent operation that is of a small size and has a revenue of a limited amount depending on how good the business actually functions.
Some examples of small businesses would be, a family owned (non-franchise) restaurant, a local bakery, a printing shop or a neighborhood bookstore, etc.
Check this out:Tip For Small Business Management
How small business owners pay themselves?
Depending on how well the business does that’s how the owner determine their own check, wage or pay. Normally small business owners take money out in a form of withdrawal from their company or entity. And it’s not actually called a wage transaction, according to the accounting formats. It’s recorded as drawings in the company’s accounting system.
Therefore, if the business is doing very well then the owner would be able to withdraw loads for himself/herself out of the profit. On the opposite side, if the business’s sales or services isn’t performing well or up to par, then the profit wouldn’t be able to support much favorable drawings for the owner.
Unlike staffs, small business owners do not have fixed pay or salary. They don’t have a clock-in or clock-out time sheet, they don’t have a limited amount of work, they don’t have a fixed task and they don’t have too much time to unwind. These are some generalizations of small business owners’ tasks. For they have to work all day long to keep up with the wants, the economy and the market, basically. They over-work because they are willing to make the sacrifice for their own business to flow smoothly. They stress out planning ahead and trying to come up with marketing tactics and strategies to overtake competitors. Hence, in a simple word, small business owners work non-stop, because only then profit increases. And when that happens, they withdraw more to pay themselves for the hard work and time they put it.
Small business owners might be the boss of their own company but they do more work than the staffs they employ. Therefore, making their pay in forms of gratitude and pleasing withdrawals from the company’s accounting for personal use. Why not, it’s their profit to begin with anyhow.
