EmpressofBiz, Biz tips. How much should you PAY..

Just answered the question to a group  that I belong to..
How much should I pay myself?
Should I pay myself if I am the owner of the business. 

Paying yourself most definitley YES! 
HOW MUCH?  ...Depends...some things to think about BEFORE you give yourself a salary!

My clients and students often do one of two things:

1. They do not figure their salary needs at all in the business.They will take their salary from the "profits" .  Yet rarely is their enough profit to take a salary and quickly put their personal credit and home life in jeopardy.

2. Or they pay themselves a ridiculous amount and take all the money out of the business and put the business in jeopardy

A REASONABLE SALARY is a MUST! What is reasonable?

My answer to students and clients is:

1. How much is your personal budget? What do you need to take out of this business to make sure your personal commitments are taken care of? It makes no difference whether you have a partner or spouse who is "willing" to pick up the budget...while you are starting the business...you must have your salary amount in as part of your costs.

2. What would have to pay someone to do your job? It usually isn't any small amount.

3. Paying yourself is part of establishing your costs so you can give price your product or service accurately.

4. BTW...supporting you and the business usually does not last long and resentment quickly rears its head. Plan to contribute from day one...it eliminates a good deal of family problems. You can start low...but start and raise it as you go..
I hope this people thinking of what salary they need to take out of the business. Check out my blog www.empressofbiz.blogspot.com for more comments on small business.

EMPRESS OF BIZ! Listen! Learn! Prosper! -Ruth Byrd Smith...Woman of Achievement

EMPRESS OF BIZ! Listen! Learn! Prosper! - Live &Prosper ; Recorded Episodes:

Ruth Byrd Smith, Director of the Allegheny County Minority, Women and Disadvanatged Department is a woman who has always had the courage to speak out and work to improve the ecnomic and social status of minorities and women in our area.  Her inspiring messge and view of leadership is one you want to listen to.  Join me as I intervew Ruth Byrd Smith and prepared to be inspired and motivated.  Start you day with us.

ELIMINATING the CONFUSION

COST ACCOUNTING vs TAX ACCOUNTING

Accounting, a word that conjures up the image of Ebeneezer  Scrooge sitting at his desk with quill in hand entering numbers in a ledger.  Not a favorable image is it?  Yet keeping records is essential for business success.  Few companies make it a priority to keep their records up to date.  Nor do they take the time to understand the difference between tax accounting and cost accounting.  Both are necessary and yet each one has a different goal. 

Tax accounting, is what you do to make various government entities happy and report to them.   It aims at taking advantage of all the opportunities the government offers to reduce tax obligations. It doesn’t care about all the details of cost.  Instead it deals in gross figures.  It accounts for insurance premiums paid rather than rates of insurance, for example.  It allows plans of depreciation for investments rather than expected time of replacement.  The lower the profit calculated, the lower the tax obligation.  It is difficult, if not impossible, to develop proper pricing from tax accounting.

Cost Accounting,  is aimed at calculating all of the costs incurred in producing a product, service or project so the business owner or manager knows how much the company must charge for the item.

Management priorities are to stay in business, recover the owners’ investments in the business itself, earn a reasonable return on the investment in the business for the owners, pay off company debt, build a reserve to reduce the need for debt and produce a reasonable profit, after taxes, for the company’s growth.

In order to accomplish these objectives, cost accounting must allocate costs where they belong. Deductible  taxes and employee benefits must be attached to the proper categories:  materials that become an integral part of the project, labor with varying rates for different categories, such as, social security, medicare, unemployment insurance and retirement benefits.

Other project costs must be added, like the transportation of materials and workers, the cost per hour or mile for each vehicle or piece of heavy equipment (original cost, years of life, maintenance costs, repair costs, insurance costs and the expected annual hours of use) and subcontractors fees.

Administrative costs, finance costs, plus commissions and royalties must then be added.

Neglecting the tasks and details of cost accounting for pricing products and services properly is one of the reason ninety percent of businesses fail within the first ten years of their beginning.

                     - JoAnn Forrester & James W. Martin, SI Business Associates, 412-440-6969

Hate to do this...give us a call...with our Price it Perfect Cost Management,(TM)

 CFO in a Box System it is a snap for us...412-440-6969.

P.S.  Watch for our upcoming E-book on Pricing...coming soon!

EmpressofBiz, Biz Tips Attitude for Monday

Biz TiP:  Monday Attitude:   Bosses...you want productivity? :) 

Instead of gloomy faces & people dreading to come to work? :(

Then make Monday morning meetings positive.  If you have problems...make it HOW do we solve this?  Instead of who can we blame?

Monday sets the tone for the week.  Make it sure it is one that  gets people working together instead of hiding in their office trying to escape blame.

EmpressofBiz: Listen Learn Prosper 1pm Susan Newman

Join in Tomorrow as I interview Susan Newman nationally recognized expert on branding.  Time 1pm on www.talkshoe.com or syndicated on pplmag.com. The great thing about podcasting is that you can always listen later...check us out...wisdom like Sue's is important to hear over and over again.

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  JoAnn Forrester The great thing about the show...you can always listen later...wisdom like Susan's needs to be heard many times over.

EMPRESS OF BIZ! Listen! Learn! Prosper! - Live & Recorded Episodes

www.talkshoe.com

JoAnn R. Forrester is founder, president and owner of S I Business Associates, a business growth management firm established in 1975. Over 75,000 hours of experience in teaching, consulting, financing, human relations, speaking, writing and business development classes, writing and public relations,...

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  JoAnn Forrester The great thing about the show...you can always listen later...wisdom like Susan's needs to be heard many times over.

EmpressofBiz, Biz Tips Each Day brings an

Sunday Biz TiP: Reflection Time: Each day brings you an 

opportunity to do something positive for:

 your business, your employees and  your community....

It can be a big gesture or a series of small ones...you can

make a difference each day by your choice of actions...

Make it a good one for all of us.

EMPRESS OF BIZ! Listen! Learn! Prosper! - SBA resources for women Busienss owners.:

EMPRESS OF BIZ! Listen! Learn! Prosper! - Live & Propser Recorded Episodes:
Today's guest Karan Waigand, Economic Development Special for the Small Business Administration and Women Business Advocate for W. PA. discusses women's impact on the economy and what program resources the SBA has to help them.  Check it out...t heir website is www.sba.gov.

EmpressofBiz, Biz Tips..Financial Terms..Cash Flow

 Financial Term: Cash Flow...what money comes into the business...and what goes out. Often feels like a lot more goes out than comes in. 

Cash Flow...The money that comes in from sales of product or services. It can be in the form of Cash, credit cards, debit cards or checks. You can be receiving money daily through your business, especially if you are retail, or you can be receiving  it after you have invoiced or billed your customers. 

An indication that a company is in trouble is when your CASH flow IS always LOW.

In other words what you are paying out is MORE than you are bringing in.   When this is happening.... you need to immediately LOOK at your business and review your marketing and pricing structure.  

Need help?  Give us a call at 412-440-6969.  S. I. Business Associates has been guiding small business to success since 1975.

EmpressofBiz, Biz Tips: Reflection...what are you in business for?

Sunday Biz TiP: Reflection Time: 

What are you in business for? 

To make a difference in your community? 

To make money?

To be independent?

Become wealthy?

Build Security? 

Be creative?

Be innovative?

To Help Your Family?

 It is important to know your "reasons'" for STARTING and BUILDING a business.
 When your business model strays away from the reason you are in business...this is when you become unhappy. The business is your creation...make sure it is what you want.

Need to sort out what is going on in your business and keep on track...give SIBA a call...we have been guiding small business to success since 1975.  We know from our own personal experience what it means to create the business you want.  412-440-6969.