As a pharmacy owner you will need to take care of yourself and in most instances the pharmacy business is your source of income. In the article, Your Business Is Not Your ATM: 6 Ways To Separate Your Personal And Business Finances, I emphasized that all pharmacy owners should place themselves on salary in order to avoid spending your business money indiscriminately on your personal needs.
To a lot of people, it may be difficult to determine that actual amount to pay as salary to themselves. They get confused because if they pay too much it will affect their business and if they pay too little they may not be able to meet their immediate needs. This post will give you some pieces of advice on how to set a salary for yourself.
- It is expected that you already have an accountant for your business (usually for a start-up pharmacy the accountant is not a fulltime staff) or a financial adviser. Consult with him on to get some advice regarding how to plan your salary including those of your staff. They are financial experts and they will advise you concerning the effect on your cash flow as well as the legal aspects especially as regard taxes.
- Research the range of salary other pharmacy business owners take in your community. This figure may not be uniform because it may depend on the cash flow and the financial intelligence of the businesses. This will give you an idea of what to pay yourself.
- Determine your personal needs and prioritize them. In other words, you should create a budget. When you have your budget written down you will know how much you need monthly for your personal upkeep. This will guide you in taking a salary from your business. However, if the figure is too large, you must cut out some unnecessary expenses. You make sacrifices for your business otherwise you will hamper its growth.
- Take an increment as your business grows. With good business management your pharmacy business will experience growth and what that means is that more money is available for your business. As business grows you can give yourself a raise from time to time. If you can make it a structured plan it will be better for your business and your business budget. The raise should be gradual.
- If you feel you may not be able to set an objective salary for yourself, you should commission an expert to draw up a salary scale for your business. The expert will work independently in determining a salary scale for you and all your staff. He will consider your cash flow, the industry trend, the legal aspects and the taxman and will come up with a workable plan.
Determining a salary for yourself and your staff is a very important decision to make in your business and you should take your time to come up with something workable that will not affect the running and growth of your business.