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What is a reasonable wage for the owner?

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The simple test is an honest answer to the question: “Could I be earning more working for someone else?” If that answer is no, then the business pays you what you are worth in the open market. If the answer is yes, then your business needs work.

Or, suppose that you were planning retirement or became disabled. You could hire a manager in order to step back from the business and pay that person your wages. Would your pay be enough to attract and keep that person? If the answer is yes, then you are paying yourself a market value wage.

If you calculate the total hours you spend working and your wages are less than the wages of person who sweeps the floor, then you are not paying yourself enough.

Consider this scenario: You have a potential buyer across the desk from you. Of course, the price for the company is the topic. He or she wants to know how much he or she will earn and how much will be left over in the company. Is there a bottom line after his or her reasonable wage?

Pricing Strategies for Small Business

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