Pay Yourself First!
30% of Entrepreneurs don’t pay themselves. At all. Out of the other 70%, the majority pay themselves between $25-50,000…Is this the dream of entrepreneurship we’ve been told about? What’s happening here that needs to change? It all starts with paying yourself first.
Paying yourself first may seem counterproductive, but it forces you to spend less and save more. It’s all about using a “smaller plate”. When you give yourself a “smaller plate” to spend from, your operating budget is forced to use a smaller amount of your revenue, meaning, you spend less. It’s the same as using a smaller plate when you go to a buffet, you’re forced to eat less.
This also forces you to pay yourself, to save for taxes, to save for an emergency fund, the possibilities are endless. By “auto-saving” in this way, you’re changing the spending behavior and allowing yourself to take a paycheck before any other expenses are met.
These concepts are covered more in-depth in the book, “Profit First” by Mike Michalowicz. I highly recommend it and believe it is life changing as a business owner. If you would like to learn more, check out the book, or, leave a comment below this post.