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Discussion Starter · #1 ·
i have been a journeyman plumber for 5 years and was an apprentice for 3 years,i work for a company now and will be taking my masters in 4 months

i plan on starting my own business in a year or two
i already have my own truck(stocked) ,most of the tools i will need,
drain machines,and some steady customers

after overhead
how much do you pay yourself salary weekly?
 

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At first? Enough to pay the bills and eat off of, plus some minor mad money (20 bucks a week).
Once you get into the black and have three to six months in capital reserves, then I'd start to think about a small raise.

If you make the two year mark and have six months capital reserves and the company is showing a healthy profit and an upward growth trend, you have all the tools and equipment you care to buy for those jobs you do more than once every two months or so, then its time to think about a bigger paycheck.

However, this is something you really need to consider before you get too far along. I advise you not to take home any less than you are making now. But, you have to consider your taxes as well. Don't think that because you're making 15 bucks an hour or even 25 bucks an hour, that this is the sum total of your expense to the company. You have FIT and FICA, SUI/Medicare, etc. that you must pay into.

So my best piece of advice? Go talk with a good CPA before you start out. They can tell you what to expect as as a small business.

Doing the job is the easy part. Running the company is like juggling cats.
 

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Discussion Starter · #4 ·
thanks for your answers so far
i am trying to learn everything i can in the next year or two
(business part) so i am not going into business blind
i know the plumbing part of it, just never worked back in the office
 

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Discussion Starter · #6 ·
I didn't even pay myself a salary at all the first year....I invested almost everything back into the business. But I am now way ahead of the game because of it and have started off recently with a meager $50,000 salary. By next year, I will raise it as necessary.
how did you pay for your house bills,food ect?
 

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My wife did. She 'financed' the business the first year. She's recently quit her job to stay home with the baby, and my business is finally taking off, so I'll return the favor. Its been our plan all along! :icon_cheesygrin:
I know a few people whos spouse worked a full time job too which helped with starting. Me, I have a few people who live with me that help pay some of the bills so it was not too hard to start.
 

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We downsized our house. (Sold high in PA, bought low in SC). We bought a smaller home with a big downpayment and the rest was put aside for living expenses. If you are able to pay yourself at all the first year, you are doing REALLY well. Most people don't realize all the expenses of running a business.

Our first year, no pay. The business was able to pay back our start up expenses (Service truck, incororation expenses, stock, tools, equip. etc). Everytime we got to the point where there was actually money in the account - it was time to do some marketing. Advertising is an expense you cannot avoid. From our experience, we'd spend $1000.00 to get $200.00 worth of business. You are shaking your head wondering WHAT??? Sounds like a losing proposition.

Wrong! Advertising takes time. The $1000.00 gave us one customer. However, after we treated that customer so well, they told two friends who told two or three more friends and it snowballs. Unfortunately the snowballing doesn't happen immediately.

A realtor told us when we first opened "You just need to get your first 50 customers and then you'll do just fine." We'd agree, then walk away shaking our heads. "HOW DO YOU GET THE FIRST 50 TO EVEN KNOW YOU EXIST?" The answer - "TIME AND MONEY"
 

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I pay myself 1000 a week after taxes and it takes all of it right now just to survive. Thats for a family of 4, two kids and a wife all in school. The only things that we could cut back on is tv, eating out and wiser grocery shopping. You really need to come up with a budget and you have to think about paying for your own health insurance when working for yourself.
 

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You need to pay yourself a salary and an owner's draw. The salary covers your work hours, the owner's draw covers your time running the business. Otherwise you own a job and not a business. Service plumbers average around 1000 billable hours, installing plumbers average around 1700 billable hours. So set your rates accordingly, whether you go F/R or hourly.
 
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