963. The Owner's Draw Dilemma: Why You Need To Start Paying Yourself More

The Kelly Roach Show

Kelly Roach

Entrepreneurship, Business

4.9 • 965 Ratings

🗓️ 19 October 2023

⏱️ 23 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Kelly challenges the conventional wisdom of minimal owner's draw and compensation for tax purposes.

She urges entrepreneurs to pay themselves a salary that covers their needs, savings, and desired lifestyle, emphasizing the link between financial security and mental health. Kelly uncovers the pitfalls of underpaying yourself, from jeopardizing your family's well-being during tough times to diminishing your negotiating power when selling your business and how it's important to accurately represent your company's true profits to potential buyers.

Also in this episode:

Mental And Physical Health: Underpaying yourself can lead to financial stress and negatively impact your mental and physical health, which in turn can affect your ability to lead your business effectively.
Preparing For Business Challenges: Relying solely on dividends when your business underperforms can lead to financial instability at home.
Negotiating Power And Business Valuation: Potential buyers will assess what it would cost to replace you and your role within the company, which should be a reasonable compensation benchmark.
Understanding True Profitability: Underrepresenting your compensation can distort the true profitability of your company, making it difficult to make informed decisions and strategic changes.
Clear Vision For Growth: Paying yourself what you're worth helps you see your business's performance clearly, allowing you to make necessary changes and decisions to drive growth.
Tax Considerations: It's important to strike a balance between minimizing taxes and maintaining financial stability.

Stay Connected With Kelly Roach:

Grab One Of Kelly's Roach's Bestselling Books:

This Podcast Is Produced, Engineered & Edited By: Simplified Impact

Transcript

Click on a timestamp to play from that location

0:00.0	Welcome to the Kelly Roach Show, the place for no fluff easy to implement 20 minute or
0:10.8	less business and leadership lessons to help you build a sustainable business that scales.
0:17.6	Lead with integrity and create a lasting legacy.
0:21.6	I'm Kelly Roach, former NFL cheerleader and Fortune 500 executive turned 8 figure entrepreneur.
0:28.1	Let's get started.
0:30.2	Welcome back to the Kelly Roach Show, today we are talking about reevaluating your owner's
0:35.8	compensation and I have some fire for you today. Okay, so for all my listeners that are tax
0:44.4	strategist, accountants and even bookkeepers, you may want to put earmuffs on for today's
0:49.3	episode because you're probably not going to like it and you're probably not going to agree.
0:53.8	But I do have good reason for my thoughts on what I'm going to share and so I hope you'll be
1:00.5	open to a new perspective. So common knowledge in entrepreneur land or the common thought
1:09.1	process in the world of entrepreneurship is that owners should pay themselves as little as
1:14.7	humanly possible just to say off the radar of the IRS so that they don't overpay on taxes.
1:22.8	Now in today's episode, I'm going to break down why I feel that this is quite
1:26.5	possibly the worst advice that you could ever take in your business and what the repercussions
1:31.8	are for so many entrepreneurs because of it. So let's back up for just a moment.
1:38.3	We have been diving into this season of chirous, of innovation, of really talking about not
1:47.1	just how do we build these incredible businesses that glorify God that are innovative,
1:52.4	that are profitable, that are sustainable, that allows to put our families first.
1:56.2	But we want to build businesses that create an environment in which we can sustain our mental
2:02.5	health there. I said it. I said it. And this concept of owners paying themselves as little as
2:12.0	humanly possible, I believe can cause a mental health crisis for someone. And I'll tell you why.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Kelly Roach, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Kelly Roach and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.