Mike Andes advises small-business owners to minimize personal expenses to the essentials (rent, insurance, etc.), treat remaining business cash as discretionary for growth, and prioritize raising prices or increasing cash reserves if funds run low. The clip focuses on how to balance taking paychecks versus reinvesting profits during early growth when personal income is inconsistent.
How do you suggest business owners pay themselves a percentage of profit each month or salary? We are a small business still growing and it's hard to decide sometimes if we want a paycheck or to invest in a business while we are profitable. Our personal income is very inconsistent. Before you even start a business in my opinion it's like let's pare back our personal expenses to exactly what we need to be able to afford just to get by. Pay for rent, pay for insurance, whatever you need to get by and that money that is like non negotiable. You have to have it to survive everything that's left in the business. That's what you get to quote unquote play with and use to grow the business. If that money is running low guess what we're going to raise prices and then as time goes on you're going to get more cash in that account. Grow the business and eventually you'll raise that weekly amount.
