Sole trader wages?

Hello there Phil,

It may be an idea to set up 2 business accounts - a current and a savings. One where you can transfer money immediately between the savings and the current account. You will benefit from higher interest rate in the savings. It is entirely up to you how much you pay yourself. Certainly I would recommend that this goes from your business to your personal account, as you can then keep a track on the business accounts records.

It is entirely up to you how much you pay yourself. I would advise that you work out a personal survival budget, and only draw that much out of your business account. Anything else is then transferred to savings. A cashflow for the business is essential, as you say at the moment you have few overheads, but you say that you are concerned about quiet times. Do you know when these quiet times are likely to be happening, are you ramping up some marketing activity to try and smooth out the peaks and troughs? Do you know how much the marketing activity will cost, etc? All of this could be put into a cashflow - so that you can then forecast ahead.

There is always unplanned expenditure for a start up business, so it's prudent of you to think ahead and not want to take all of the money that your business will be turning over until you become more used to the sales activity that you will generate.

Hello Phil

I am following on from Chrissie here. I have a business bank account and a personal bank account. There are lots of ways of paying yourself and it may be a good idea to plan this out. A good rule of thumb is if you aim for the moon you will hit the stars. Aim for the stars and you will hit the clouds, aim for the clouds and, need I say more.

My worry is that if you focus on a minimum amount to live on, that may be all you will get, be too greedy and you may go belly up! Focus on why you started up on your own, was it a financial goal, if so could you achieve this in six months? If so work for the minimum wage you can survive on and pump prime the business, then in six months time you pay yourself what you were paid when you were employed. Any excess of income over expenditure at the end of the financial year (and I do advise you put aside a contingency), is your yearly bonus.

Sorry, another thought, try and live on 70% of your personal income, 10% to a savings account, 10% on debt reduction and 10% donated to charity. I would stress this is just another thought!!!

Enjoy the journey

Kind regards

Harry R Smith