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04-26-2008, 12:32 PM
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Senior Member
Status:
"On My Way To The Good Life!"
(set 2 days ago)
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Join Date: Mar 2008
Location: Chicago=Hell-Hole
3,213 posts, read 1,921,996 times
Reputation: 1966
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A small business question.....
If a manufacturing plant is bringing in $6,500,000 in revs./annual
and cash flow is $1.9 million. How much does the owner pay him/herself?
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04-26-2008, 01:25 PM
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Senior Member
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Join Date: Oct 2007
Location: ID
1,220 posts, read 965,735 times
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It depends. Is it a corporation and are you talking about shareholder distributions? Or are you trying to figure out an appropriate salary for running the day-to-day operations?
You also have to balance reinvesting some of the cash flow into the business for equipment, marketing, and growth. Growth is usually expensive for a company and it is always a tough choice whether to slow the growth down and "enjoy" the profit or whether to keep growing.
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10-29-2008, 01:35 PM
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Junior Member
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Join Date: Oct 2008
Reputation: 10
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No it isn't a corporation. It is a retail, sole ownership business. I am mainly concerned about his debt to the suppliers.
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10-29-2008, 04:34 PM
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Senior Member
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Join Date: Mar 2007
833 posts, read 459,884 times
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Quote:
Originally Posted by bulkeley
No it isn't a corporation. It is a retail, sole ownership business. I am mainly concerned about his debt to the suppliers.
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A retail manufacturing facility????? |
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10-31-2008, 08:21 AM
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Senior Member
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Join Date: Jul 2007
Location: Southwest Missouri
1,627 posts, read 1,073,574 times
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Quote:
Originally Posted by ChicagoRon
If a manufacturing plant is bringing in $6,500,000 in revs./annual
and cash flow is $1.9 million. How much does the owner pay him/herself?
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No way to tell, based on what little information you've provided. |
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10-31-2008, 08:53 AM
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Senior Member
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Join Date: Dec 2007
9,907 posts, read 4,849,540 times
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What's your total net? That's completely different from cash flow.
However, in an attempt to answer your question, you should pay yourself a salary. Not a huge salary, but one where you are comfortable. Take advantage such things as a company car, IF your operation is stable and growing. Keep your overhead as small as possible.
Now, if you are the only shareholder, then pay yourself a dividend at the end of the year out of profits, keeping some out to pay your corporate taxes and holding some back as retained earnings. Have a very good accountant who understands your industry, including its unique ups and downs.
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