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  1. #1
    Junior Member
    Join Date
    Apr 2006
    Posts
    14

    Can I pay myself ANYTHING??

    I am working on my business plan for a coffee shop. A bit of an eye opener - to say the least... pretty scary.... However I am convinced that this is a viable option and that I can make it work.

    Question - I am trying to figure out costs and do my financials. I realize that there will probably be little to no profit for sometime - considering I'll be paying off quite a bit of investment loans for a few years. Long story short - do I add in a salary for myself... how do I keep my home lights on if not? Also - If I don't, then I'll not be paying income tax, EI etc. Confusion abounds.. Any advise would be GREATLY appreciated.

  2. #2
    Member
    Join Date
    Feb 2006
    Location
    Mississippi
    Posts
    46
    Hi. I figured myself a salary in my business plan and in my operating costs...we too enjoy our lights and daily meals! I know what you mean about eye opening - WOW! We hope to open in June and there is always something else to consider.....Good luck to you.
    life is meant for living....not for looking back and wishing....

  3. #3
    Junior Member
    Join Date
    May 2006
    Posts
    12
    No salary for yourself ???? Does not sound like a good plan. Would you work for a coffee shop for free ? I'd recheck your plans .. What your shooting for in any business is profit .. that's earnings above and beyond compensation for running the business.

    Good Day ...

  4. #4
    Senior Member
    Join Date
    Nov 2004
    Posts
    576
    This is a very important question and one that is raised regularly. In my free online 12-step guide to starting a successful coffee business it's #9:

    http://www.cafemakers.com/coffee-busine ... rself.html

    Hope this helps,

    Andrew

  5. #5
    Junior Member
    Join Date
    Jun 2006
    Posts
    4
    You need to figure in a salary for youself. What you can do, is start off with a low salary expectation, then give yourself a "Raise" down the road depending on how the business does.

  6. #6
    Senior Member
    Join Date
    Apr 2006
    Location
    Austin, Tx
    Posts
    316

    salary

    they are right...you must include your salary if for no other reason than the banks will notice the omission. DO NOT assume that your salary will be based on yearly profits or you will be paying yourself nothing for at least the first year. I made this mistake and ended up making about $2000 over my living expences and that was with me working behind the counter for a majority(up to 90hrs/wk)of the time. Also plan for the worst. Include plans for expanding the business into your proposal to give yourself a little breathing room...it also makes you look more ambitious. Banks like to make a profit and they believe they will see a quicker return if they think you are going for something bigger than a mom and pop. I know it goes against logic but that has been my observation.
    I must not fear. Fear is the mind-killer. Fear is the little death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me.

  7. #7
    Junior Member
    Join Date
    Jun 2006
    Posts
    20
    The last thing you need at the end of busting your hump in your own shop all day is to get home and wonder when the eviction notice is coming from your apartment landlord.

    One of the most common mistakes small business owners make is to neglect to pay themselves anything. At the end of the day if your business fails and you've never taken anything out for the work that you have done you end up with no business and no home, instead of just no business.

    If your financial projections over your first few years are not generating a postive result when paying yourself is included as an expense then you need to stop moving ahead with your plan until you find a way for the result to be positive, or your plan will fail.

    Worst case scenario is that you have to declare the business bankrupt. When all the debt gets written off the amount of debt might as well be higher by the amount of your salary. It won't make things any harder and you don't end up sleeping in a box or your mom's basement.

  8. #8
    Junior Member
    Join Date
    Jun 2020
    Location
    Ho Chi Minh, vietnam
    Posts
    11
    Just do it!, buld your coffee brand first (for 6-12 months, yes it will probably be little to no profit for sometime), but then I'll got more better!

  9. #9
    Junior Member
    Join Date
    Jun 2020
    Posts
    17
    As I understand you! I just recently had the same problem!)

 

 

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