Are you an owner without being paid? If you’re not, that’s great! If you are, you definitely need to watch this video because you may be deceived by your financial without knowing it. Our founder, W. Michael Hsu clearly explains why as an owner, you should get paid and how your number may deceive you. Let’s roll!

Topic – How Owner Salary Affects Your Business

How do entrepreneurs get paid?

There are three ways for entrepreneurs to get paid. First, everyone is familiar with this. We get paid when we finish a job or a task. Second, we get paid as the owners or investors. When the company make money, we take a piece of profit from the company. Last but not least, we earn a piece of revenue by taking the risk. For example, I lend you $10,000 and charge you for 5% interest. I earn this 5% interest for the risk take since there’s the chance that I can’t get my money back.

Why owner salary matters?

[00:58] Let’s use an example to elaborate this — If you’re running a $1.5 million company, and owner’s work is worth $120,000 on the marketing which means nearly 10% of your profit. 10% of net profits can totally skew your P&L one way or another. You can be deceived by the numbers, and thinking you’re running a profitable business. Or it could be worse — build your goals and strategies on this illusion. You can imagine how this can hurt your business.

The benefits of calculating owner’s pay

[01:41] On the other hand, there are some benefits to calculate your owner’s pay. Through knowing and factoring owner’s pay gives you a clear picture of your financial status. Also, you’re able to make necessary decision. For example, should you consider outsourcing or delegate the works to the vendors?  The most important is how to best use of your time to move the company forward

Ping us if you’d like to learn more. We’re more than happy to share some of the ways we help our customers to calculate their owner’s pay. Cheers!