Running your own business can be exciting, but figuring out how and how much to pay yourself is often tough, especially when you’re just starting out. Palesa Mabasa, business development head at FNB, says it is important to find the right balance between rewarding yourself and making sure your business stays strong. “The first step is knowing the minimum amount required for you as an owner to meet your living expenses,” she said.
“This is vital because if the business is the only form of income you are receiving, you need to be able to ensure business revenues that support this.” She says a road to full self-employment begins with a side hustle that becomes one’s main hustle. “When the side hustle makes the money, you would earn as a salary consistently,” adds Mabasa. “Take the owner of an events company, for example.
Landing your first big job is a great feeling, and it might be tempting to take a large payout. “But if you stick to a modest salary and leave most of the money in the business, you’ll be ready when something big comes up. If you’ve saved up some money in the business, you can jump on opportunities and put on a great event without worrying about where the cash will come from.” Mabasa highlights that savings in a business help entrepreneurs pay the bills and keep the business going.
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“Banks and investors also like to see that you’re saving for the future, not just spending everything right away. Reinvesting in the business, showing commitment.” She emphasises that having money set aside means you can:
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