It is common for small business owners to put themselves at the back of the queue when it comes to pay. Staff are paid, suppliers are paid, tax bills are covered, and then, if anything remains, the owner may take a share. At first glance this may feel responsible and even admirable. However, there are strong reasons why owners should place their own remuneration higher up the list.
A reward for risk and effort
Running a business involves risk. Owners often commit capital, work long hours, and carry responsibility for decisions that affect employees and customers. It is reasonable that this commitment is rewarded. By prioritising their own pay, owners recognise the value of their contribution and avoid falling into the trap of always sacrificing personal needs for the sake of the business.
Encouraging discipline in the finances
If owner pay is treated as an afterthought, the business will expand to use whatever funds are available. This can create a cycle where there is never enough left for the person in charge. Setting a regular and realistic remuneration level encourages the business to operate within tighter boundaries. It focuses attention on efficiency and profitability since the owner’s pay is regarded as a non-negotiable cost in the same way as wages or rent.
Personal financial security
Placing personal income at the bottom of the pile can create real strain. Household bills, mortgages, and personal commitments do not wait until the business has a good month. Regular, predictable remuneration gives owners the stability to plan their personal finances with confidence. Without it, stress builds and can spill over into business decisions, sometimes leading to poor choices.
Clearer planning for growth
When owners set a fair level of pay from the outset, they gain a clearer picture of the true profitability of their business. If the company can cover staff, overheads, taxes, and the owner’s pay, then any surplus can be invested in growth or kept as reserves. This avoids the illusion of higher profits that appear only because the owner is underpaying themselves. Investors and lenders are also more likely to trust figures that include a realistic allowance for management remuneration.
Conclusion
Paying yourself first does not mean ignoring obligations to staff or suppliers. It means acknowledging that your role has a cost and that your efforts deserve fair reward. By building owner remuneration into the structure of the business, you create financial discipline, personal security, and a more accurate view of profitability. In short, prioritising your own pay strengthens both the business and your wellbeing.