There are many components to running a successful business: motivated staff, perfect pricing, improving processes, maximising revenue, limiting expenses… And the list goes on. But many business owners miss out on the most critical component holding all the others together – themselves.
What if the key to expanding your business and making it run smoother was all about paying yourself more. It may sound counterintuitive, if anything. Aren’t you supposed to sacrifice all you can to ensure that your business succeeds at the end of the day? Well, as it may turn out, the answer to that question is likely a resounding “NO”. Let us explain…
You are your business’s most valuable asset
Think about it in terms of insurance – say you are dependent on an asset that could make or break your business operations, surely you’d take every measure to ensure that it is protected? Doesn’t it follow that if you are your most valuable asset, you should pay yourself and invest in yourself as much as your value merits?
We’re not saying you should triple your salary and run your business into the ground, but valuing yourself leads to you valuing your business more. As soon as you pay yourself what you are worth, your business success will matter more, and your profitability will be more than a mere façade (with a burnt out entrepreneur becoming more and more despondent because they feel that they aren’t receiving as much as they are putting in).
Your mental and physical health is important to the health of your business. Take care of yourself and own your value, because if you are happy in your role, you’re rewarding yourself for what you put in and not punishing yourself.
Paying yourself more turns you into a replaceable asset
Once again, your first thought might be to kick back against the idea of making yourself replaceable. But as a business decision, it holds merit. If you underpay yourself, you’ll need to find money for payroll when creating a vacancy to take over some of your duties. If you pay yourself enough, you ensure that any of your duties can be transferred with ease and without the headache of forking out money for a previously unpaid job. Remember, you cannot treat your services as though you were a volunteer. You need to grow your business to be in the position to go on without you if it came to it.
Paying yourself is a motivator to grow and not stagnate
If you undervalue the work you do, you are essentially neglecting a key area for business growth and creating a misrepresentation of what it takes to move your business forward. Regardless of whether you pay yourself enough, any semblance of growth will continue to increase the load on your capacity; the more that capacity increases, the more you need to be ready to supplement that load with a true reflection of what your input is worth. If you take yourself out of the frame and you cannot see your business continuing (or growing for that matter), the warning signs should be flashing to say, “This is not sustainable”.
Always make decisions about your own remuneration a business decision
Don’t get it wrong – the decision to pay yourself more should always be to the benefit of your business. No decision should ever be based on status or luxury. But if your investment in your business is not adequately valued, you miss out on the cultivation of the hard work and dedication that lead to growth.
Taking time to evaluate your worth and the pros or cons that greater imbursement could hold for your long-term success is not something that should be done on a whim. It is always advised that you sit down with your financial adviser or accounting adviser to determine the path that is most sustainable for your business while ensuring that your own value is also established.
Just remember that, as an entrepreneur, you are your business’s greatest asset – it was your vision that created the dream and your flourishing that will see it reach new heights. Make sure you know your worth in relation to your business and treat yourself as a business asset worth protecting and growing.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.