Service Business Owners: How to earn a good wage.

When I first started working for myself, I was very naive….green about alot of things! I remember my husband then boyfriend saying to me, the joy of a job is just doing the work and getting paid every month! Working for yourself, you have to find the work, do the work and get paid, not always easy to do all 3!

The biggest issue I had and what I see a lot of small businesses do is knowing how to make money, how to make enough money to run your business and pay yourself.

I recently put out on social media some graphic cards with what it meant to pay yourself X amount and how much you had to earn. Judging by people’s reaction they were shocked! 

We have to know the basics! It took me long enough, don’t make the same mistakes! 

What does it mean to earn a decent wage while working for yourself?

How to get a wage of €500/week €1000/week etc 

Do you know what you need to do to make that? 

For example using a simple Profit First System,Book by Mike Michalowicz ( Use your own %’s depending on how much you make, not accounting for debt or cost of goods here…keeping it simple)

People think earning 10,000 is a lot in their business a month, I hear people say oh wow I wish I could earn that, but you will see from this example if you don't make this a normal goal. What and how are you paying yourself?

Here is the truth, if you do not make 10K months a normal for you, you will not run a business that will pay you! 

This is just a basic example ball parking 30% tax - I am NOT a book keeper just using this basic example to get a message across. 

Making €3000/month Example 

1. Revenue/Sales - 100% - Make 3000 a month in sales and bank.
2.  20% expenses - €600 €3000 - 600= €2400
3. 30% Tax ( ballpark) - €720Net Income €2400 - €720 = €1680 
4. 5% of Net Income -Company Holding Money - Goes back into company account €84
5. 40 %  of Net Income - Wages  - €588/month €147/week
6. 5 %  of Net Income - Profit - goes into profit account. €84

Versus 

Making €10,000/month Example

1. Revenue/Sales - 100% - Make €10,000 a month in sales and bank. 
2. 20% expenses of €10,000 - €2000, €10,000- 2000= €8000
3. 30% Tax of €8000 ( ballpark) - €2400 Net Income €8000 - €2000 = €6000
4. 5% of Net Income €6,000 -Company Holding Money - Goes back into company account €300
5. 40 %  of Net Income €6,000 - Wages  - €2,400 a month/€600/week
6. 5 %  of Net Income €6,000 - Profit - goes into profit account. €300

Versus

Making €20,000/month Example

1. Revenue/Sales - 100% - Make €20,000 a month in sales and bank. 
2. 20% expenses of €20,000 - €4000, €20,000- 4000= €16,000
3. 30% Tax of €16,000 ( ballpark) - €4,800 Net Income €16000 - €4800 = €11,200
4. 5% of Net Income €11,200 -Company Holding Money - Goes back into company account €560
5. 40 %  of Net Income €11,200 - Wages  - €4480 a month/€1,120/week
6. 5 %  of Net Income €11,200 - Profit - goes into profit account. €560

• As your Income goes up you may decide to change your Profit First % to keep more money in your business. 

So you can see from these examples of earning 3k, 10k and 20k - what needs to happen to earn a decent wage as a business owner!

1. Playing small wont work! 
2. Know your numbers, have a book keeping system.
3. Understand your business model to bring in the sales.
4. Have a banking system that supports your profit first system above. For example create an income account, expense account and tax account. You could also have a profit account. 
5. Keep your business expenses within a % range you are happy with.
6. Have a marketing plan to attract the number of customers you need a month. 

It took me longer than it should have to understand the amount you had to charge to get a decent wage! This is one of my biggest issues right now with small business owners is the lack of understanding of this. I want all business owners especially those starting out to know this, because you need a business model and plan that works, price your services right to make this money and you have to have a marketing strategy for your business to be visible to attract more customers. 

Accounting and book-keeping have been my arch enemy for years, I never liked it, in fact I was almost allergic to it. But the business who does not embrace their book keeping is a business in the dark! I tortured myself for years trying to do my books myself, using excel, leaving it all until the last minute, torturing my poor bookkeeper with late submissions of files. I’m now a big fan of xero, in fact it has saved me, a story for another day. 

Not being in control of my numbers was painful. 

But I was creating the pain. 

Why do we create this pain, why because it keeps us small and in the dark to our own greatest potential. Creating pain like this in our business keeps us busy and not focusing on the big vision and implementing your business plan. Where else are you sabotaging yourself in your business? 

Business owners, it is time to claim your best potential in your business, time to make good money, get well paid and create a business not just a busy fool low paying job for yourself. I know getting to 10k months takes time, you need to get setup and find your way at the start. However, some businesses spend too much time in the startup stage, you can leap forward if you have the right business model in place. If too much time has passed and If this isn’t happening for you, it is time to review your business model and marketing strategy. 

Some words here might seem harsh but I have learned all of the lessons above. I’m letting go of all the bullshit that was holding me back over the years. Each year I grow more and more. And in 2024 I’m going all in! 

So which are you a business that goes All-In or a business who is just dipping their big toe in?

I work with service businesses who want to double their income and grow their business globally online. If you are ready to go ALL-In this year, listen to my latest podcast here.

https://www.marthafrasertraining.com/podcasts/global-online-stars-go-global-online-from-home/episodes/2148483486

If you are ready to go ALL-In here are some ways I can help you. 

1. Startup Stars - ready to start your service business or side income?
2. Global Online Stars - ready to double your income and create digital revenue streams?
3. Martha's Get It Done Club - Want to go All-In, time to get your work done and fully commit!
4. Book a free call with me to discuss where you are now and what you want to achieve! 
5. Podcast