Free calculator for consulting firm owners
How much can a consulting firm owner pay themselves?
A consulting owner usually bills hours too. Your pay depends on profit after the team, and on how much cash is tied up in unbilled work and slow invoices.
The starting numbers are an example for a consulting firm. Replace them with yours.
Three rules for paying yourself from a consulting firm
- Base steady pay on average profit across several months.
- Check unbilled work and slow invoices before any extra draw.
- Personal taxes come out of what you take. Ask your accountant how much to set aside.
What changes the answer for a consulting firm
A big invoice paid in one month can look like a raise. It usually pays for months of work already done. Steady pay from average profit keeps you out of the next gap.
The worked example
In the example, the business keeps $75,000. That covers $56,000 for two payrolls, $9,000 of monthly bills and $10,000 due soon. Steady pay comes to $11,200 a month. Anything above $75,000 in the bank is spare.
A common question
How should a consulting owner pay themselves when revenue is lumpy?
Set a steady amount from average monthly profit, and take profit distributions after the books close on a strong quarter.
Know what is safe to take, every week
One Page CFO shows the cash above your safe line every Monday, from your QuickBooks, checked by a CFO.