How to Pay Yourself While Growing Your Business

Jun 13, 2025

When you're building a business, it’s tempting to put every dollar back into it, especially in the early days. But consistently skipping your own paycheck isn't sustainable. Paying yourself is part of running a healthy, long-term business.

Here’s how to budget smartly so you can grow and pay yourself along the way.

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Why Paying Yourself Matters

Burnout is real: If you're not earning anything, you're more likely to burn out or give up.
It keeps your personal finances stable: Your still have rent, bills, and groceries to cover.
It build discipline: Treating yourself as an employee sets the foundation for scaling, and eventually hiring others.

Step 1: Know Your Numbers

Before you decide how much to pay yourself, you need to understand what your business can afford.

Start by calculating:

Monthly revenue
Fixed business expenses (rent, software, inventory)
Variable costs (shipping, materials, contractor fees)
Debt payments and taxes

What’s left after all of that is your net profit, and a portion of this is what you can pay yourself.

Step 2: Choose How to Pay Yourself

There are two main ways small business owners pay themselves:

Owner’s Draw: You withdraw money as needed from the business profits. This is common for sole proprietors and LLCs.
Salary: You pay yourself a consistent amount through payroll. This is more structured and often used by S-Corps or incorporated businesses.

Not sure which one fits your business? It’s okay to start with a draw and move to a salary later as things stabilize.

Read more about both option in our blog Owner's Draw vs. Salary.

Step 3: Decide on the Right Amount

A good rule of thumb:
Start with 20–30% of your net profit, or enough to cover your basic personal needs.

If you’re in a high-growth phase, it’s okay to keep it lean, just make sure you’re paying yourself something. Even $100/month can build the habit.

Step 4: Separate Personal and Business Finances

Open a business bank account and transfer your “paycheck” into your personal account on a regular schedule (e.g., biweekly or monthly). This makes it easier to track spending and stay organized for taxes or funding.

Step 5: Revisit Your Budget Often

As your revenue grows, revisit your budget. Can you increase your pay slightly? Can you automate it? Consistency builds confidence, and helps you plan your life outside of the business.

Bottom Line

You started this business to give yourself freedom. Paying yourself doesn’t mean you’re not serious about growth. It means you’re serious about sustainability.

Looking for ways to grow your income stream or find extra cash flow? Check out our grant opportunities and $1000 Instant Grants.

Need more help? Book a 1-on-1 call with a Skip expert.