The importance of paying oneself salary as an entrepreneurer.
Often times we get so caught up with having significant growth and success in our businesses that we forget to infact plan for our personal spending. These personal spendings are essentials and even if we dont plan for it, we will end up spending on them salary or no salary. The mistake people make is to take both the cost and pricerit back into the business. Unfortunately this is one of things that kills a business indirectly.
A lot of entrepreneurer do this a lot and it eventually end up harming the business. This happens when the entrepreneurer start to take money randomly for the business. This is even common among small scale business people, they really don't have any rule and so they take money periodically and take even the goods without paying with the mindset that they are the owner of the business. The fact that you are the owner doesn't mean you won't pay. On every item that is being bought, it has to be accounted for. When this takings go on and on, it start to affect the business.
This is why its very important to devise a salary means to pay oneself from the profit being made. Even if its a small percentage, its still something. This will give a sense of discipline to not touch the goods and the business money anyhow. This isn't just for business people, but also everyone that is earning on their own. Its very easy to lose focus and overspeand money that shouldn't be spend. A salary will make sure to eradicate that.
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This is summed up in "financial education". This post is for everyone, not only for small entrepreneurs, but for everyday life.
You're absolutely right. Thank you so much for the comment
This is counter productive.
Growing your business while at the same time unconsciously corrupting it.
Thank you for sharing such valuable information.
I also believe that this is not only applicable for small scale businesses but also for the general public.
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You need to have a separate account for your business from your personal account! Here, you don't mix up the expense and spending.
This has happened a whole lot of time, most business owners do this which is not good, everything you sell should be accountable for.