Starting your own business and being an entrepreneur is amazing; you get to be in control of your hours, what you do, and who you impact. But if you think you’re going to be an overnight millionaire, think again. When you are the CEO of a startup, you are the last to get paid.
“In Silicon Valley, 75% of founders pay themselves less than $75,000 per year and 66% pay themselves less than $50,000 per year (source).”
The first full year that Style Collective existed, I didn’t pay myself a dime. I put every single penny back into my business so that I could eventually bring on a part-time systems admin and then a part-time graphic designer last fall. Every penny went to them; and honestly, I was thrilled that I could pay someone to do the things that I didn’t know how to do very well.
In the last six months, I have brought on a few more helping hands for website development, social media management, content creation, and event management for meetups. This month, I even hired my first full-time, 40 hours a week employee.
Everyone keeps messaging me and emailing me saying that I’m so successful and that my business has grown so fast; that I’m doing amazing. I couldn’t agree more, SC is growing and thriving, and my team is incredible. I am fulfilled on so many levels.
But, I think what many people don’t realize is that I am a founder. I pay myself minimum wage. Yup, $7.50 an hour or $1,200 a month.
“The Compass salary survey found that monthly revenue is the greatest predictor of a founder’s salary, but until a company is exceeding $10,000 per month in revenue, the average founder’s salary doesn’t exceed $50,000 (source).”
So, the question to ask yourself here: would you work 60-80 hours a week for free for a year? How about for minimum wage for another year after that? Are you patient enough to plant the seeds, nurture them, and wait for them to grow?
My Dad told me on the phone this week that it’s like sweat equity; you buy a home that needs some serious TLC, flip the inside yourself, and then sell it for a profit. You are working for free while fixing up the home, but all of your hard work pays off when you reach the final product and sell it. Building a company is kind of like that; eventually, I will pay myself more than minimum wage, but I am patient and I am waiting for the right time!
You can’t be short-sighted when you are a founder; you need to be in it for the long term and be patient. Sometimes things will be tough, there will feast and famine, but it’s worth it. I promise you!
Thoughts about this article? I’d love to hear what you think below!