The Right Way to Pay Yourself

Here's a story that plays out in lawn care businesses across the country every year.

A business owner works sixty hours a week. His business does $800,000 in revenue. His P&L shows a healthy net profit. But when someone asks what he pays himself, he gets a little vague.

He takes money out of the business when he needs it. He pays some personal bills out of the business account. He calls it profit. He hasn't really thought about it as a salary.

This is a financial time bomb — and it's far more common than anyone talks about.

Your pay as the owner of a lawn care business should appear as a line item in your overhead section. Not a random withdrawal. Not an owner's draw that obscures your true profitability. A real expense, budgeted and paid consistently.

Why does this matter? Because if your labor isn't included in your cost structure, your P&L is lying to you about how profitable your business really is.

If the business couldn't afford to hire someone to replace you at what your time is worth — you don't actually have a profitable business. You have a job that you own.

There's no universal number, but a useful way to think about it: what would you have to pay someone else to do what you do?

If you're an operator-owner doing crew work, that number might be $55,000 to $65,000. If you're a full-time operator managing a multi-crew company, the number is higher. If you're purely in a CEO/strategic role, higher still.

Whatever the number is, it should be on your books — and it should be in overhead, not hiding in a personal expense line or showing up as a random draw.

Your salary is what you pay yourself for the work you do. It's a business expense.

A distribution is what you take out of the business as a return on your ownership. It comes from net profit — after all expenses, including your salary, are covered.

Most lawn care owners conflate these two things. When that happens, the business looks more profitable than it is — because the owner's labor isn't being counted as a cost.

Separating them clearly gives you a true picture of your business health. And a true picture is the only one worth looking at.

On a properly structured lawn care P&L, you'll see an owner's salary line in overhead — consistent, every month, like any other payroll expense. Below that, your net profit is calculated with that cost already included.

If your business is hitting 20% net profit after paying you a fair salary for your time, that's a genuinely healthy business. That's the standard to aim for.

Not sure if your compensation is set up correctly? Let's look at your books together.