Are you paying yourself properly from your business?
A lot of business owners get used to treating their own pay as flexible. You need to not forget to pay yourself properly.
The suppliers, staff, tax liabilities and monthly bills tend to take priority. Sooner or later a customer pays late, a cost lands unexpectedly, or a quiet month follows a busy one, and the owner’s pay becomes the easiest thing to squeeze.
Sometimes that is just a reality of early-stage ownership. There may be a period where the business needs careful reinvestment and the owner makes a deliberate short-term choice. That is different from spending years taking less than the business should support, while telling yourself it will improve when things calm down.
So, how long has this been going on? How much longer are you prepared for it to continue?
A quick summary
If you cannot pay yourself properly from your business, the issue is often a symptom of something wider. It may sit in sales, pricing, margins, systems, team performance, customer mix, cashflow management or financial controls. Our model, The Coaching Star, will help you identify where the imbalance is coming from, so you can stop treating owner pay as an afterthought.
The pain is not only financial
Not paying yourself properly does not just affect your bank account. FSB research found 36% of business owners generated less than £25,000 in gross profit over the previous year.
It also affects how you feel about the business. You can start to resent the very thing you built. You may find yourself working long hours, carrying the difficult decisions, dealing with the stress, and still wondering why there is not enough left at the end.
The business may look fine from the outside. The team is busy, and turnover may even be respectable. The question is whether it is producing the right return for the risk, effort and responsibility you are carrying.
What is really causing it?
At UK Growth Coach, we use our model the Coaching Star to look across the connected parts of the business, with Profit Flow sitting at the centre.
If the owner is not being paid properly, the cause is rarely just “cash is tight”; cash is a link in the chain, rather than the start of the problem.
- You may not be getting enough of the right type and value of work into the business. That points towards marketing strategy, sales strategy and positioning.
- You may be winning work, but at the wrong margin. That brings pricing, delivery efficiency and customer mix into the conversation.
- You may have inefficient systems, duplicated work, poor handovers or too much rework. That sits in business systems and team performance.
- You may not have clear enough financial controls, so the business is finding out too late what it can afford.
The symptom is not always the real cause.
What would happen if you paid yourself first?
Mike Michalowicz’s Profit First popularised this idea: instead of treating profit as whatever remains after expenses, decide what profit should be protected and then build the business around what is left.
We do not apply that as a rigid rule, and you should take proper accountancy advice on how you draw money from the company, but the thinking is a helpful framing device.
If you paid yourself properly, what would be left?
That question can be uncomfortable, but it is clarifying. Do you need more of the right work? Better margins? Fewer unprofitable customers? Stronger systems? Better cash management?
It moves the conversation away from hope and into the mechanics of your business.
Stop normalising the gap
We find that many owners are patient for too long or have a string of reasons (or excuses!) for why they’ve tolerated under-paying themselves for a long time. They keep saying the same thing: when the next project lands, when the new person settles in, when sales improve, when the difficult client finishes, when the market gets easier.
Some of those things may help, but they may not solve the underlying imbalance.
If this has been going on for months or years, be more direct with yourself. What are you tolerating? What is it costing you personally? What decision are you avoiding because it would force the business to change?
A Business Review can help find the cause
At UK Growth Coach, our complimentary 90-minute Business Review helps owners look properly at what is happening now, where the pressure is coming from and what should change first.
If you cannot pay yourself properly, we would use that time to look beyond the surface. Is the issue sales, pricing, financial control, systems, team performance, owner behaviour, or a combination of several areas?
You need a clear view of the causes and a route forward.
FAQs
How much should I pay myself as a business owner?
There is no single right figure, because it depends on your business model, cashflow, profit, tax position, personal needs, and the stage your business is at (and where you want it to go). A more useful question is whether your pay reflects the risk, responsibility and effort you are putting into the business, or whether you are simply taking whatever is left.
Why can’t I pay myself properly from my business?
The cause may sit in sales, pricing, margins, cashflow, systems, team performance or financial control. Owner pay is often where the problem shows up, rather than the whole problem itself.
How do I pay myself from a limited company?
Limited company directors usually take money through salary, dividends, expenses or directors’ loans, depending on the situation. You should speak to your accountant before deciding or making changes to how you take money from your company.
Should I pay myself before business expenses?
You need to understand the principle carefully. Profit First encourages owners to stop treating profit and owner reward as whatever is left over, but the detail needs to be handled properly with tax, cashflow and business obligations in mind.
Why is my business busy but I still cannot pay myself?
A busy business can still have weak margins, inefficient systems, poor pricing or too much unprofitable work. Turnover does not automatically mean healthy owner income.
What does owner pay say about my business?
Owner pay can reveal whether the business model is working. If the owner is carrying the risk and pressure but not being rewarded properly, it may show that something in your business is out of balance.
How can I improve profit so I can pay myself more?
Start by looking at the type of work you are winning, the margins being achieved, how efficiently the work is delivered, and where money is leaking away through people, systems or poor controls. The answer is often buried in a combination of factors!
What is Profit First?
Profit First is a book by Mike Michalowicz that encourages business owners to protect profit first rather than waiting to see what is left after expenses. The thinking can be useful, even if you do not apply the system exactly.
How does the Coaching Star help with owner pay?
The Coaching Star helps identify which areas of the business are affecting your Profit Flow. If owner pay is poor, the cause might sit in sales, marketing, systems, financial controls, team performance or the owner’s own role.
Can a Business Review help me understand why I cannot pay myself properly?
Yes. A Business Review can help you look at the whole business and identify the causes behind the problem. The aim is to move from frustration to a clearer view of what needs to change.
