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Forum - Payback: When should you take a salary from your business?

Payback: When should you take a salary from your business?

Thu, 08/04/2010 - 15:42 — FishBowl

Marcela in Fishbowl Two has been running her business for a few months now, and is finally starting to edge closer to her break even mark, and is beginning to think about taking a salary from the business.

As she has managed to gain investment in her business, is it valid to use some of that investment to pay herself back for the money she put in as a director?

Thanks for the advice Tim.

Thu, 22/04/2010 - 13:07 — FishBowl

There should be agreement between you and the investor about when you can draw from the business, and how much. I would be surprised if this was not formalised when the investment was made?

If there is no such agreement, I would go to the investor with a reasonable proposition - it is not ideal timing because the business is not making money yet, and taking cash out may drain the business of needed working capital. You need to balance this with your personal need for cash.

Good luck!

Tim

Thu, 08/04/2010 - 18:09 — timhaggard