If you have started a new small business, how can you start paying yourself to pay your personal bills?

By Pam Newman • Jun 19, 2007

Opinions expressed by Entrepreneur contributors are their own.

My wife and I worked for a Christian bookstore for 10 years. The owner retired, so we opened our own. The money that goes into the business account--can it be used to pay personal bills?

No--do not pay your personal bills out of the business account. Hopefully you have created a business plan. You need to assess what the business can afford to pay you and you should visit with your personal accountant regarding this as well. Normally we will take a portion of our payment as payroll expense and the other as an equity withdrawal - they are taxed differently. Then from this payment you will pay your personal bills out of your personal account. Do not comingle funds - keep business and personal separate.

Pam Newman

Pam Newman is a Certified Management Accountant, author and Certified QuickBooks ProAdvisor for Financial and Point-of-Sale software. She is also president of RPPC, Inc., which provides customized business development services.

Editor's Pick

After Her Brother's Death in Iraq Became News, a PR Strategist Learned Firsthand Why the Way We Tell Stories Matters — and It Changed Her Career

A Leader's Most Powerful Tool Is Executive Capital. Here's What It Is — and How to Earn It.

One Man's Casual Side Hustle Became an International Phenomenon — And It's on Track to See $15 Million in Revenue This Year

3 Reasons to Keep Posting on LinkedIn, Even If Nobody Is Engaging With You

6 Time-Saving Tips to Know Before Starting a Side Hustle This Summer

Why a Strong Chief Financial Officer Is Crucial for Your Franchise — and What to Look for When Hiring One

Most Popular

See all

Marketing

How to Use Pop-Up Advertisements on Your Website Without Annoying Users

Pop-ups are potent tools for web conversions. Here's how to use them without driving your users away.

By Itai Sadan

Personal Finance

How to Make 6 Figures Right Out Of College

Don't get stuck in the system and break out using this method.

By Sean Boyle

Business News

The Virgin Islands Want to Serve Elon Musk a Subpoena, But They Can't Find Him

Government officials would like to talk to Tesla's owner as part of an investigation into the Jeffrey Epstein case.

By Jonathan Small

Operations & Logistics

7 Ways Data Helps Your Restaurant Succeed

By using underutilized analytics and data, you can gain valuable insights into your business and make data-driven decisions to achieve long-term success