Member-only story
There is a friend of mine, Mark, who started a company about four years ago. Mark raised angel funding to start his company.
The company has grown at a nice clip, and the company has a real chance at long term success. At the same time, Mark and his partner have taken a salary of $0 for the first four years.
Every time I have lunch with Mark I tell him that he should take a salary. Even if the salary is $1,000 per month, he should start taking a salary.
Mark’s reaction is always the same. “I know we should start taking salaries, but I can’t convince my partner.”
I admire Mark for continuing to draw down his savings because he believes so much in the company. But I still wish they would pay themselves first.
Why is paying yourself something so important?
Paying yourself a small salary creates fiscal discipline.
You need to get to a living wage as quickly as possible. You may not get there in year one, but paying yourself a small salary starts the process.
Then each year increase your salary until you are finally at a living wage. Then you don’t have to worry about paying your bills.
