How to Figure Out Your Own Compensation

Quick Summary
When your business is in its early stages, it may not earn enough to pay you a regular salary. Here are some options to consider to help get through the start-up period.

Pay Yourself What You Can

During the early stages of your business, you need to keep business overhead down. Try to be reasonable. How much compensation can the business afford? You may have to make some sacrifices or think creatively.

Pay Yourself Based on Industry Standards

Your company operates in the real world, so it should pay salaries at a realistic level. This means at or near industry standards.

Postpone Payment (Use It as a Loan to Your Company)

This gives you credit for the fair value of your time. But it postpones compensation.

Pay Yourself More Later (When the Business Can Afford It)

This is another form of postponed payment. Rather than treat it as a loan, simply start with a lower salary. It can rise later as the company matures and is able to pay you more.
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