Take the money

Many accountants – including ours when we started our business – strongly suggest design studio owners shouldn’t be paid a wage. Instead they suggest owners get paid using whatever money is ‘left’ in the business at the end of each month.

 

Here are three reasons we think design business owners should be paid a wage:

1. The psychological motivation of a weekly wage is not to be underestimated. Starting and building a business is a risk, and it’s difficult on many levels. Being paid a regular, consistent wage is proof you are building a successful and sustainable business. That feeling of accomplishment is hard to beat. It’s good for our mental health and it’s good for our financial health.
   
2. Being paid a weekly wage makes it easier to borrow money. Borrowing money is often a necessary evil. To borrow from a bank needs proof of a regular income. The sooner you start being paid regularly, the easier it will be to borrow money.
3. Because wages form part of a sustainable business. Fiscal fitness comes from understanding your business overheads. Wages are largest part of any design business’ monthly costs. If you don’t pay all employees wages, you don’t know your real overheads. If you don’t know your overheads you don’t know your cost rate. If you don’t know your cost rate it makes it more difficult to accurately estimate project costs.
   

After all, freelancers get paid for their work; staff get paid for their work and suppliers get paid for their services.

Taking a regular, weekly wage is motivating. And it’s good business practice.