If your small business has moved past the initial start-up phase and is now a lucrative venture, then congratulations! As a small business owner myself, I understand how tasking it is to keep your business up and running. For all the efforts that you’ve taken to make your business successful, it is only justified that you pay yourself for it, although we know you may have worked for free in the early days.
It’s a long-standing riddle that every entrepreneur comes across while planning for their business – What do I pay myself?
We want our clients to pay themselves a decent amount after all the overheads – both recurring and non-recurring, are addressed.
There are various theories when it comes to this issue. But, at Northants Accounting we tell you of the two most common premises for small businesses:
Pay Yourself Enough To Get By
This is mainly implied to the commencement stage where you’re operating in the shadows. The trick here is to minimise your overhead so as to cut down the amount of capital required to make your venture a commercial success. By reducing your overhead costs, your net profits will peak and your net losses will dip giving your business lean operating costs until it establishes a strong foothold.
Solely for this purpose, we provide business planning services to help our clients with the initial hassle of strengthening roots in their respective industry.
Pay Yourself For What You’re Worth
You’ve got to factor this is in your business plan itself so that you have an accurate picture of how much capital you will require to fund your business.
So, on what basis will you decide an amount that is sufficient to get by and what you are worth?
You’ve got to put in some really good planning and factor in simple maths, then budget that amount accordingly into your income and cash-flow projections. This will help you figure out how much operating capital you will need during the shaping stages of your venture’s development.
There are many aspects that fit into the equation, such as legal formalities of operation and tax requirements laid down by HMRC.
At Northants Accounting, we help you balance your needs against what you feel you’re worth, what you need to get by, the things your business will be able to sustain, and the manner in which your income will be taxed along with your business.
We have our client’s best interest at heart which is why we’re doing what we do!
Legal and Tax Considerations
A lot of small business owners fail to realise that when you’re self-employed, the legal form under which your business functions, has a direct impact on the way HMRC views your tax status and thus, will have bearings and legalities of their own on how you pay yourself.
We help our clients streamline their tax structures, simplify it and along the way make it as efficient as possible. For this purpose, we provide our clients with the most promising accounting software – XERO, to help them make sense of the numbers and data it produces.
The entire process of running a business and keeping it afloat will be a lot easier with the right kind of support and advice that we’ve got to offer. We’ve got the best accountants onboard to help crunch and multiply the numbers as per the situation.
If you want to find out a bit more about what it’s like to work with us, then please get in touch!
Tel: 01604 330129 Email: email@example.com