YOUR OWN PAY BELONGS IN THE OVERHEAD RATE.
Market rate owner salary is $120,000 to $180,000 for a $3M to $8M company. Leave it out and 10 percent overhead is really 13.75 percent, so every bid is short. Draws above net profit come out of cash the company should have kept, which is why the draw is set from the 13 week forecast and not from the bank balance.
A bank balance includes money owed to payroll, vendors and taxes. An owner who books $70,000 of salary and takes $180,000 in total draws leaves $110,000 coming out of net income that should have stayed in the company as cash. The guides in this hub cover the salary figure, the overhead math, the draw rule and the move from handling every job to managing the numbers.
WHAT IT MEANS.
Owner pay is the money an owner takes from the company, and it has two parts: a fixed market rate salary that belongs in the overhead rate, and draws, which are distributions of net profit.
WHY IT BREAKS.
Salary Left Out Flatters Every Report
When the owner takes whatever cash is left, the owner's compensation is absorbed into overhead without being counted. Gross margin looks better than it is, overhead looks lighter, and every bid priced off that rate underfunds the owner's own paycheck. At a $180,000 market salary, the books are missing $180,000 of cost.
Draws Above Profit Come Out of Cash
Only salary belongs in overhead. Draws are distributions of net profit, so a draw larger than the profit is paid from working capital. The overhead rate is calculated on the booked salary and the bids carry the shortfall.
The Owner Becomes the Financial System
An owner who is the job costing, the collections department and the forecast works 100 hour weeks and still earns less than the owner would earn working for somebody else. A 13 week forecast and worked collections returned $310K in 30 days at one company, and the owner's time fell to about 5 hours a month.
EVERYTHING ON THIS SUBJECT.
Every guide below is a full page on one part of this subject. Start at the top if the whole thing is new; jump to the one that describes your week if it's not.
- How Much Should an Owner Pay ThemselvesA $180,000 fixed salary is in the overhead rate every bid recovers, and draws come out of net profit.
- Owner Salary and OverheadOwner pay is an overhead cost, not profit.
- Owner Draw vs SalaryOnly salary belongs in overhead, at a market rate of $120,000 to $180,000 for a $3M to $8M owner.
- Owner Not Paying ThemselvesLeave your own pay out and gross margin flatters you, overhead is light, and every bid priced off that rate subsidizes your own paycheck.
- Working 100 Hours, Making NothingThe owner became the financial system, so money was lost wherever he couldn't look.
- Owner-Operator to CEOWhat has to exist before delegation works: job costing that works without you reading it, a WIP report anybody can follow, and 90 day cash visibility.
- Safe Owner DrawPayroll, payables, taxes and the forecast low point come out of the bank balance first.
- Separate Bank AccountsOne account cannot tell you what is spendable.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing and no payroll.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the books, the job costing, and the software. No payroll.
FREQUENTLY ASKED.
