Essentially, there are two ways startup organizations usually pay themselves:
Going with strategy #1?
a. Pay down as many debts as possible prior to starting your business:
-Decreases required income each month
-Increases personal net worth and credit score needed for borrowing capital for organizational funding
Going with strategy #2?
a. MW x 12 x [1+(.01(I x 4)] = BW
a. If you’re currently making $15/hr, annual pay would be $31,200.
b. $31,200/12 = $2,600 (monthly Income)
c. $2,600 x 12 x [1+(.01(3.53 x 4)]
Keep in mind, this is just one recommended equation used to determine your desired annual salary, though through mentorship, research, and diligence, you can succeed in determining the building blocks needed to build your dream while sustaining yourself and fulfilling your own financial responsibilities. Skillologist, when asked how much you will make or how you will pay your bills while pursuing the opportunity you have been dreaming of, be confident that there is indeed a clear answer to those questions. Be sure to use discernment and caution in determining if Strategy #1, Strategy #2, or an alternative strategy works best for you, and be prepared to move forward confidently in the choice you have made.
You can break away from the 9 a.m. – 5 p.m. schedule and still pay yourself, Skillologist. It’s all a matter of meticulous financial planning. With the right skill set and mindset, Skillologist, you can be that much closer to conquering the steps needed to lay a strong financial foundation for your flourishing vision.
*Information in article referenced from:
"Paying Yourself: From Startup and Beyond." Entrepreneur.com. Web. 17 Nov 2011. www.entrepreneur.com/article/80024.