Should the business owner always be the highest paid person at his or her company? Are there situations where the answer is “yes” and some where it is “no”? Or is it more of a philosophical or company culture sort of thing? Every business owner is unique. They might have similar drives, dreams, or goals, but there are different factors in her/his background that are what motivate them and fuel the entrepreneurial fire.
Knowingly and subconsciously, your life experiences shape your psychology as an owner. If you have read any of my other blogs, mine are easy to figure out, with anger over growing up poor at the top of my list. 🙂
In a small business, the time when these pieces of our personalities collide are in the early days, with how much you pay yourself at the top of the list. Most people starting or buying a business see it to an end. “I want to live a certain type of lifestyle (being your own boss, creating personal wealth, having work/life balance, etc.) and opening this (restaurant, tanning salon, consulting business, etc.) is my means to that end.” Where the rubber meets the road though is how patient you can be while waiting for that dream to become a reality.
“Fake it till you make it.” Famous last words for many a business owner. And, unfortunately, it is a quite common approach. At its crux, this approach means portraying an image you cannot financially live up to. It is leasing a Mercedes instead of driving your 2007 Kia. It is renting an $18 per square foot office when your garage would do just as fine. And it is paying yourself a $100,000 salary to support your “faking” before you have made your first sale.
Yet, even business owners that avoid this struggle, the thought of paying an employee more than yourself can feel defeating. After all, the guy that wrote that business book you read insisted you “Pay yourself first”. You are the one working on the weekends and taking the daily stresses of ownership home each night. But it is the strongest among us that can look past this point of pride toward the lifestyle goal further down the road. Putting the needs of your business ahead of yourself is the mark of a true entrepreneur. It is hiring the salesperson and the large commission that comes with him/her when you have not had a vacation in 4 years. It is hiring that extra warehouse worker even when your Kia needs a new muffler. And it means you are working for tomorrow’s long-term vision while enduring today’s stress and pain.
A few small business startups are blessed with such a unique product or service that they are profitable immediately. Most are not and that is okay! In the beginning, it is about the grind. Every drop of blood, ounce of sweat, and bucket of tears is an investment in your company as much as any dollar you put into it. Paying someone more than yourself because they have a skill set you do not, will free up your time so you can work on growing or perfecting the business which – a priceless investment, a wise investment paid with a little slice of your pride