Continue to Site

Owner operator salary in the begining

B

bkw001

New member
Just out of curiosity, for those seasoned guys who have started at least one shop, What did you pay yourself during the first year. My partner and I are trying to figure this out right now. Unfortunately, I don’t have a trust fund, nor does my partner, and we both will need capital to live off of during the first six months to a year. If you feel comfortable answering, how much did you pay yourself during the first year, first six months etc. We will both be in the shop full time + so will be able to limit payroll costs, but figuring an exact number that doesn’t bleed the business is daunting…
Thanks in advance.
 
Last edited:
I would expect nothing and consider whatever you end up making as a blessing.

Others on here will tell you they made from day one and good for them. However, I think it more realastic that you will not make any considerable amount of money in the first year or so.
 
Last edited:
My first year in business I would guess about 50 cents per hour is what I took out of the business. That sum also came near the very end of the year.
 
Last edited:
In our 1st year, my business partner and I took turns delivering and lived off of the tips. Since we basically lived in the shop, we spent very little in our personal lives outside of rent and minimal utilities. We occasionally took withdrawls when necessary and plowed every other cent back into paying off our initial debts.

For the life of me, I can’t remember when we felt secure enough to begin paying ourselves a steady wage. During Year Two maybe… I’ll ask Kris tomorrow, he has a good memory of those early days.
 
Last edited:
Thanks for the advise, that is what i imagined as well. hell if I put a shower head on the mop sink I could just live in the shop. Honestly, I would like to be in a position where we do not pay ourselves at all for the first year and work off the debt, but we both need something coming in to the personal bank account to pay rent, dog food etc. Unfortunately, partner has a mortgage, while I can rent any Sh*t hole that’s cheap.
 
Last edited:
I did pay myself something…not much though. It was about 11 years ago and my check was $600 every two weeks, about $16,000 a year. I supplimented that with delivery tips and worked constantly. There were definitely pay period where I had to “hold” my check for a week before cashing it.

Painful, yes definitely but it all turned out ok and the last several years have been very profitiable. I know where you coming from though, I couldn’t make it work without paying myself something. Not sure if that helps.
 
Last edited:
I’ve been open for 15 months and I have not paid myself a dime. Been running break even since day one and plan to stay that way for the forseeable future. My current break even does include $2500 a month in advertising though. Luckily I have the luxury of being able to afford my bills.

Putting yourself in a situation where your business has to be profitable from day one for you too live seems like a red flag.
 
Last edited:
I dont think you should go into this venture looking to pay yourselves a set amount. I dont think I have ever paid myself the same amount in a month twice in a row. The easiest, smartest, (scariest too) way to pay yourself to simply pay yourself with what is “left over”. If you and your partner dont need any extra upgrades, split the profits after EVERY bill for the month has been paid. Some months will be good, some will be bad, its a gamble, but you cannot pay yourself a set salary at first. Paying bills late so you can pay yourselves can create quite a hole to dig out of.

If you and your partner take turns delivering, you may be able to plan personal finances better - like I’ve mentioned before, 3 of my delivery drivers have nicer houses than mine! If you are busy enough, it can be a gold mine!

Good luck man!
 
Last edited:
A lot has to do with where you draw the line between startup costs and operating losses. For example, if you prepaid your first year of insurance, covered all your utility deposits, ramped up inventory from cash, put 20K in the bank and call it your opening marketing fund and another 20K for intial operating losses it will look different on paper than if you do not do those things, but then have to feed the beast those amounts as you go.

I opened 12 years ago this summer and purchased the second store four months later. I put in about 110K initially. I Took no money at all for the first six months and put in about 5K per month during that time. For the next four months after that I probably took out 20K. Then had to put that money back in again plus another 50K over the next 8 months… so on balance no money out for the first 17 months.

BTW, also took no money out in all of 2009…

I do run the store with a general manager and I am not in the business day to day. If I had done that differently I think the second full year would have been close to break even … but again a lot depends on how much cash you put in the bank at startup.
 
Last edited:
The advice that you get here will be helpful only to the extent of your “capacity” to pay anything at all and your absolute “needs”…and sometimes those two are not compatible with each other. My only advice would be to determine the availability of cashflow for salry draws only AFTER establishing a reserve for the surprise expenses that are inevitable (you know what I mean–major equipment failures, forced closing not covered by business interuption insurance, etc.).

If your profits available for distribution to yourselves are adequate, maybe you could write yourselves checks approximately equal to what you would have to pay someone to perform those tasks and resonsibilities that you have accepted, and then write additional distribution checks quarterly or annually representing most of the residual profitability.
 
Last edited:
I think posting, well nothing revealing personally, but at least circumstantial information along the lines of …

Store ; Brand New ?
Up Front ; How Much ?

The overhead costs could include personal information, it’s easy to assume or think of reasons that would keep anyone from posting, but it’s helpful information by leaps and bounds if there’s someone out there who can answer the OP’s question like this without revealing their personal info.

I’m curious about the same exact thing.
 
Last edited:
48.png
bodegahwy:
Workhorse, did you read my post?
Click to expand...
Sorry, yeah, I guess what I was getting at since I’m in a similar position, is margins of $ figures regarding, start ups. If you’re fortunate enough to have say 60K ready to go on a building with equipment and everything in, along with employees, and you applied what you said in your post, how would you work that out ?

Like I said, fortunate enough to find a business, that’s burning out for whatever reasons in a good location, and the experience to turn it around with a maximum of 80K, the strategy of “least amount of risk” is tough to do.

Good post though :!:
 
Last edited:
You must log in or register to reply here.
Back
Top