This week, I'm chatting about when you should pay yourself in your own business.
No matter how small, it's important as business owners to give ourselves a wage too.
Tune in to heat more!
Denise Duffield Thomas
Curious to check out my fashion brand?
Take a look here: iland co.
Enjoying the Podcast?
Tag me @iamjodieminto on Instagram and let me know you are listening.
Join my Community:
Fashion Business Incubator
Something I find really upsetting is when I speak with business owners, and they tell me that they're not actually paying themselves a wage at all and never have it upsets me because why else have we started a business if it's not to create a career on our own terms? What and why else are we doing it? We're not a charity. No doubt the suppliers and other staff are being paid. So why aren't you paying yourself? So today I'm going to dive deeper into this topic and tell you why you should be paying yourself a salary.
Alright, let's get started. Welcome to the online store success podcast with me Jodie Minto. If you have or are planning on launching your very own online store, you are in the right place my friend. I'm your host Jodie Minto, an award winning ecommerce mentor online fashion business owner and speaker based on the central coast of New South Wales. I started my own online fashion store from scratch as a side hustle when I was working full time in the corporate world, juggling young children and living in the Middle East. Today. That side hustle is a seven figure a year online fashion brand with stockists, and customers all over the world. Join me each week for Real Talk lessons and strategies that I used. In order to build up iland co to the million dollar a year business it is today. The lessons and strategies I share with you each week will help you build and scale your very own successful ecommerce fashion business too, because I know how my life has changed for the better after launching my own business. And I want the same for you.
So welcome to this episode where I'm going to talk about paying yourself in your business. Now I do need to start off by telling you that I am not an accountant or a financial advisor. So I'm giving you my opinion. And I do recommend you have a chat with your financial advisor to see what works for you and your unique situation. But I want to talk about paying yourself in your business because it's something I see so commonly with the members of my programme online store success and even with friends that have business who are not paying themselves anything. And after being in business for what feels like 100 years, but probably in the last if it was eight years and then I wasn't in business prior I had a break while I had children and went worked in the corporate world and then worked for myself prior to that I know how important it is for a number of reasons to pay yourself a wage.
Now when I talk about wage, this will depend on the income and the profits coming through from your business. And it can be just a small symbolic amount that automatically goes into your account from your business account to your personal account each week and you issue yourself a pay slip and we can start out with a small symbolic amount not only just to make yourself feel better about all of the work that we do in our business and that you are being rewarded for it, but just to sort of send out that energy around knowing that this is a real life business and not treating it like a little side project. Also by giving yourself a pay slip, you will be able to go and apply for a credit card apply for a phone plan, apply for a home loan or whatever it is that you might need to have a credit check for because if you're not paying yourself anything for a long period of time and then one day you turn up and say I want to you know get a credit card from my business or even personal and they will sort of look at you and say well what proof do you have that you actually have employment and are able to pay this back?
A sidenote my business is set up as a company so I employ myself as a as an employee of the company and the company issues in me a pay slip every week. I mean in actual fact is me going into Xero and I'm an employee in there and issuing myself a pay slip together with my other staff however, your situation might be different. So do double check with your accountant but having payslips is really important if you have life outside of your business that you might need to need money for. So that's one thing. Also there can be resentment and, and burnout can build if you're not actually paying yourself a wage because after a number of years, you'll turn around and think what have I got out of all of this? Nothing. If you're paying yourself even just a small nominal amount each week, you know that you've been getting something for all of that hard work and hopefully as your business, sales revenue profits increase, you can increase your wage as well.
Also, you need to consider what it would cost to replace yourself and your business, so if you weren't working in your business, and you had to hire somebody else to work and run your business for you, how much would that cost? Because ideally, that's how much you would be paying yourself, the fair market wage or salary, that you would have to pay someone else if you decided to step out of your business, for whatever reason, you know, because it's not, we shouldn't be working for free. Because if you have to replace yourself, you'd have to pay someone else to do those tasks and manage the business. And that would cost money. So right now, if you're running and working in your business, you should be paying yourself that money.
Now, I'm a friend and also a huge fan girl of Denise Duffield Thomas and she talks about money blocks that entrepreneurs often have. Because while in a practical sense, there might be enough money in your business to pay yourself perhaps it's an emotional or some sort of block, money mindset block where you feel like you don't deserve to be paid. So if you think that you fall into that category, I definitely recommend you go away and Google Denise Duffield Thomas if you don't already follow her, sign up for her newsletters, and also listened to her podcast. And she's amazing and talks specifically to those problems, those mindset problems, because often that's what it is. Now, again, I encourage you to make sure you are paying yourself a wage in your business. Because you are signifying to friends, family, the universe, that this is a real life business. This isn't just some little side hustle, or some little business that often well meaning friends and family will call it which can be soul crushing, if you are paying yourself, you yourself will step into that confidently and say no, this is a real business.
This is you know, I am employed by the business, I am paid, I pay myself and you will feel better about it and that feel good energy will attract more of it. So today, like I said, I want you to encourage you to go away and look at your business financials, have a chat with your accountant or your financial adviser, and see what your starting point is to be able to start paying yourself a salary because I'm sure you pay all of your other suppliers on time and any other contractors or team members that you have. It's time to start prioritising yourself and paying yourself in order to scale your business. And one last tip I have for you is to keep track of any money that you loan your business. So for me, like I said, I have a company and I've often had to loan personal money to the business. And that is all tracked via my Xero bookkeeping and it tells me I have a director's loan with a balance because maybe down the track your business takes off and then that money is sitting in your account, you need to be able to repay yourself without all of the different tax problems that might you might incur by just taking money straight out of your business. So keep a track of that even if it's in an Excel spreadsheet for now of any money that you are lending your your business personally. So hopefully later down the track, you can start repaying yourself that money.
That's it for me today. I, again, encourage you to go away, check and see whether or not you can pass out paying yourself a salary and even if it's just a small even if it's $50 a week, start doing it on a regular basis. automate it, and I will see you at the same time, same place next week. Bye for now. Thanks so much for listening to this episode of online store success with Jodie Minto. If you loved it, please share it with your friends on Instagram and tag me @iamjodieminto so I can say thank you. And if you really want to make my day please leave me a review on Apple podcasts. If you'd like my help in starting or scaling your online store, be sure to check out my free resources and programmes at jodieminto.com Thanks again and best of luck with your store!
My mission is to help other emerging fashion entrepreneurs crack the code of eCommerce success for a life of uncapped income, flexibility and fun.