You’ve probably heard some version of this before: 

Don’t pay yourself as the owner. 

Instead, put 100% of your money into the business.

For now, it’s all about “sweat equity.”

This romantic notion of the poverty-stricken founder, willing to put their own needs aside in pursuit of something grand, comes from a real place. 

Once upon a time, it cost a lot of money to start a business. It took a lot of time to get it up and running, and you had to build a bunch of product or infrastructure before you could get the cash flowing. 

In that world, it made sense to keep your pay low. Why dig a deeper hole?

That’s not the world we live in anymore. 

With cloud architecture and remote work, you can set up a business in a matter of hours from pretty much anywhere. And even if you are building a bigger thing, there are ways to get cash without borrowing or investors. While you build, you can sell what you already know, and use that money to build the new business.

Which means you don’t have to do the “founder poverty” thing by default -- nor should you. The most successful founders are over 40. And also, adulting comes with bills, responsibilities, and joint pain, which means you can’t survive off of pizza, air, and couches alone. You need to build a business that supports your life from Day 1. 

So don’t feel guilty or unqualified because you can’t take a vow of poverty. Instead, figure out what kind of approach works for you.

If you want the cleanest way to answer “can I afford to pay myself,” it starts here:

The owner’s work and time aren’t free.  

Your business has to account for the cost of your labor. Otherwise, you run the risk of building a business that looks “profitable,” but only because you’re working as an unpaid volunteer. If the math only works if you don’t get paid, you won’t have the capital you need to grow.

Start with what I call “minimum viable pay.” It’s the baseline amount you need to stay in the business and potentially pay someone else to take over. While the number might be aspirational at first, the business doesn’t work if it can’t support you. 

Now, I’m not saying you always pay yourself as much as possible no matter what. There will be times where you pay yourself more,, but you choose to invest it back into the business: people, systems, technology, capacity. There will be times when this is the smart move.  

The distinction I care about is you being intentional, rather than operating from a thing you read one time or saw in a movie.

Because “I could pay myself more, but I’m in growth and investment mode” is very different than “there isn’t any money left for me, and I get paid last.”

A lot of people are carrying around this idea that the “real” way to start a business is to suffer for a while. You toil in obscurity, you don’t make money, you stick it out, and then someday, you sell. 

That story is so baked into startup culture that people start treating “pay yourself later” like a rule, instead of a choice that only makes sense in certain situations.  

It’s rooted in a deeper belief that if you’re paying yourself, you’re not really committed. If you’re not struggling enough, you’re undercutting your growth potential. And when you reach your breaking point, your brain starts bargaining: 

What if I give up today and it turns around tomorrow? 

So you keep going with expectations that are too low because you’ve already put so much in. (In economics, this is called the sunk-cost fallacy.)

This is when you shift from playing to win to playing not to lose. Staying in the game and hoping it eventually works out is playing not to lose. Playing to win means you look ahead, you place bets on purpose, and you manage risks. 

Paying yourself is part of playing to win.

So, set your minimum viable pay, and treat it like rent: it gets covered first, because it represents the cost of keeping your job as CEO.

Ready to get started? Great, here’s what you do:

Need help developing a strategy for your business? Book a free 20-minute strategy session.

👉 Wait, what happens during a 20-minute strategy session?

Happy National Small Business Week! You’re doing great. 

Tariff rebates.  The US Treasury is scheduled to start refunding up to $166 billion in tariffs on May 11. Many 3PLs and customs shops are completing IEEPA database filings on behalf of their customers. And some companies, especially small and privately-held businesses, are voluntarily returning price increases to their customers, like the company behind Cards Against Humanity, as consumers begin to file class action lawsuits. At Monday’s Small Business Summit at the White House, the president used his time to let small business owners he intends to get refunded penny back plus more because it’s his money. Inspiring stuff.

LA28 suppliers. All businesses are eligible to sign up for the recently opened LA28 Supplier Portal. The City of LA has set a goal to keep 25% of the $4 billion procurement budget with LA County companies. And beyond LA, the Games will have venues in Oklahoma City, New York, Nashville, San Diego, San Jose, St. Louis, and Columbus. Get vetted now to be booked by sponsors, federations, and venues. 

DWP2 box office. An opening weekend of $234 million worldwide with 71% female audiences. The Wrap has declared women over 50 the new franchise. While change seems to be happening at a thrillingly glacial pace, say it with me…that’s all.

ICYMI, here are resources you should know about:

Who run the world? Generalists. In a moment when we’re learning an entirely new set of rapidly-evolving tools, your curious mind has again become commercially valuable. Founders, in addition to understanding their customers and market, are now students, teachers, and chief tinkerers. If you consider your job “Chief Doer,” this short podcast episode about “the new founder playbook” is a great listen.

Move over, TikTok Shop, live shopping platform WhatNot drove $8 billion in sales last year. Founded by a Funko Pop collector, anyone can now join WhatNot and run live auctions for their stuff. Sales doubled last year and a Shopify integration went live last week. If you have excess inventory and a flair for the dramatic, this might be a great outlet instead of listing with Amazon and hoping for the best. Live collectible shopping inspired GameStop to make a bid for eBay. On the flip side, for the love of D’Jewelry, our consumer FOMO needs some guardrails. WhatNot customers are reporting regret after overspending and finding themselves with some hefty backstock closets.