How Much Money Do Business Owners Make?

The question that everybody wants to know, that nobody will talk about. How much do business owners earn?
How Much Money Do Business Owners Make?
Business Owner with Moey

This is the question that everybody wants to know, that nobody will talk about through all of my business connections. How much do business owners earn? Or maybe the flip side of that question of new business owners asking - how much should I pay myself?

Nobody who is running a 'traditional business, with staff, customers - all that stuff, is going to tell the world about how much they earn.

So in this post, along with finance videos on my YouTube channel, we're digging deeper into a topic that I feel everybody should be more open about discussing because I don't know about you - but nobody in school or college taught me how to manage money. Nobody showed me how investing works, and I've had to figure all of this stuff out by myself over the years.

Head over to the channel and subscribe if you want to see more of that sort of content and go watch some more videos that I hope will help you.

Anyway, it was a good effort by my friend Scott Pinhorne, who made a video about how much he earns running an IT business... but come on Scott... you're not fooling anybody mate... I know it, you know it... it's definitely more than £600 per month eh!?

This post is for those of you who are wondering how much do 'business owners get paid. Whether you are just nosey and interested to know what people pay themselves, or perhaps thinking about starting a business but not sure how much you should be paying yourself, or if you're just in that completely oblivious camp like my mate Chris who, when you've had a really stressful week and are explaining about all of the costs which have magically appeared out of thin air, that you now need to pay for - whose response is... Yeah but the business pays for those right?!....

Yes... and who does the work so the business can afford to pay for those... Chris?



First up for those new here - hi my name is Pete, and I currently have 3 businesses, and sold a business in early 2020 - pre-covid, yep, thanking my lucky stars right there. Now I'm absolutely loving life being a mixture of a content creator, Youtuber type person - oh yeah, don't forget to head over and subscribe and like and all that stuff, I'm also co-running a video marketing agency which has over 20 staff already, and also 'Not a Business Coach' where I'm helping other IT business owners to do their thing. Part of which, funnily enough, comes up in discussion, on how much you should be taking from your business?!


So! Getting down to the point pretty quickly for those of you just interested in knowing. A quick rule of thumb is to take the annual turnover of a business, and then take anywhere from 1% to maybe, 8%, maaaybe 10% at a push, and that is going to be roughly what the owners of that business take home each year. Just divide that by 12, and you've got their monthly take home. Then just add that basic salary of £600-700 per month, which in short is the optimal base salary to pay yourself here in the UK to qualify for government pension and taxes.

So the owners of a £1m turnover business, could be taking home anything from £10k per year to £100k per year, plus their £8k or so base salary.

Now there will of course be rules to these exceptions - people drawing far more than 10% or far lower than 1%, but this is what I tend to see in the 'average' business - and for most startup businesses, I normally see that business owners will take their base £8k salary, and then take that 1-2% to give them a fairly low or mid-level salary of anywhere from £18k to £30k.

I can't remember exactly because it was literally a decade ago now, but I'm pretty sure that In my first few years of business, I just took a straight £26k or so per year - which is actually less than I was being paid at the job before that. But because I knew that you put the work in now, you get the reward later on.

So whilst business owners are technically correct when you see them say that they earn £600 per month or something, yes, on paper, that is their guaranteed salary.

However, they would typically take the rest as dividends.

This is where the whole risky business of well, business comes into play.

Because you can only take dividends IF THE COMPANY MAKES PROFIT.

If the business isn't making money, then you can't take a dividend out.

That all boils down to one of the many thousands of responsibilities a business owner has, to make sure the company is profitable, that you can pay all your overheads, and THEN - and only then, can you take your profit.

It is not even that uncommon to find business owners who pay themselves last, and sometimes to the point where they aren't even paying themselves at all. I know some business owners who are years and years into their role of owning their own business and STILL don't take a salary. Because they are living on savings whilst they try to push their business through to become something better.

Not something I personally recommend, but what I will say to anybody reading this who is running a business, go and watch this video about a really simple way to manage your money, that will always guarantee that you get paid, you'll have the cash there ready and waiting to pay your taxes, or for unexpected emergencies - it is so simple, so please go and watch that one.

Otherwise - that's it for this post. I've nothing to sell you, no links for you to click on - just thought it would be a useful video to those of you who are curious about the world of business.

If you did want to help me out, please go and watch one of these other videos, subscribe to the channel if you're not already, and I'll see you in the next one - Thanks and bye-bye.

Managing Money & Investment Advice to my younger self 🎥

🎥 How to Avoid Burnout as a Business Owner

About the author
Pete Matheson

Pete Matheson

Lifelong Tips, Tricks & Tech Reviews. Sign up to see behind the scenes of a 160k+ Subscriber YouTube Channel.

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