As the Owner of your Own Business, what kind of Salary, Compensation and Benefits do you Owe Yourself?

If you are a small businessman with your own 10-employee business, you certainly know how to determine what the contribution of each one of your employees is worth. What about the salary, compensation that you pay yourself every month out of the revenues that come into the business? Executive compensation has been an emotional topic of discussion for quite a while. Everyone clearly hates how top CEOs just pay themselves millions and give themselves salary hikes each year. What are you supposed to do as the owner of the small business? How do you know what you're worth, how much you pay yourself and what would be fair for your business? Only about 60% of American small businesses have any kind of proper written philosophy over what the company is to pay the owner. Everyone else just does whatever feels right at the moment.

Often, the salary that you pay yourself is whatever is left over after all the suppliers and employees and expenses are paid for. But if there is enough to go around that you could raise it or lower it as you wished, there are a few things you need to consider. A good way to put a price on the contribution you make to your company would be to think about what an independent investor in your company would think about what you bring to the table and would he be comfortable with what you get paid. A good way to estimate want your contributions are worth would be to list out all the important things you do for the company one after the other and then pay each kind of responsibility you carry out whatever the going rate is in the market.

But even if you can arrive a figure once you list everything out that only has to be the theoretical amount you get paid. Since seeing the company grow is a kind of compensation in itself, for going a bit of salary, compensation or benefits for the betterment of the company may not be such a bad idea. Plowing back profits into the company can be a form of investing in your own future and the future of the company that will reap you better profits and time. Owners of startup businesses usually accept next to nothing in compensation for the first few years until the business finds its feet.

You could also use industry benchmarks to determine for yourself what your job might be worth. To know what other business owners in your position make can be a great indication. You could just go on the Internet and look for what kind of salary, compensation and benefits people in your position make. You'll find free compensation figures at lots of websites. But in these things, you usually don't get very good information for free. The best estimates cost thousands of dollars. Whichever estimate you choose, you need to take with a pinch of salt.

In general, before you make your mind up about what you owe yourself, you need to consider the general economic climate at the time, the size of the company, the complexity of the business, educational qualifications and the kind of industry you work in.