working owners...

Discussion in 'Professional Chefs' started by whiskytango, Jun 6, 2015.

  1. whiskytango

    whiskytango

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    I was wondering whats the best way to pay yourself if you bought a busines. salary, hourly, or just whatever is left over after all is paid at the end of the day?
     
  2. kingfarvito

    kingfarvito

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    When you say working owner, is there a legit spot that you're actually filling or are you just there? I've seen a few owners that just show up a lot and call themselves a working owner, in that case I don't think its appropriate to draw a salary. Assuming you're actually the chef/GM it would make sense to pay yourself what you would be paying a chef/GM and then the profit left after reinvesting into the business is yours as well. At least thats been my understanding of it.
     
  3. panini

    panini

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    @whiskytango

      I personally feel that when you go into business you must pay yourself. In business you can always find an excuse not to pay yourself to take care of something else. Your burn-out will come much faster that way. In this field, almost everyone throws around the word passionate for not having sufficient income. Just me, but I think sometimes it takes money to relieve daily stress, work and be passionate and happy.

      You're tax structure will usually dictate the method in which you pay yourself. You should have an accountant  on board to answer your question.

    I can give you info on what I do if you PM me.

     Everyone and his or her brother will tell you, "I wouldn't worry about your Social Security, it won't be around when you need it anyway"

    Your personal SS is very important to pay, it will be around.

    HTH's
     
  4. whiskytango

    whiskytango

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    working as in doing prep, making orders, and supporting servers with making drinks and till.

    thanks for your responses
     
  5. kuan

    kuan Moderator Staff Member

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    You need to have one job for yourself, not doing multiple jobs.  That's just insane.  You can jump in for five minutes to help run tables but that's it.
     
  6. lagom

    lagom

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    As a working owner I pay myself a monthly salary from both my places. I dont need to physicaly work in either one, I do but thats not the point. My monthly salary comes from running my business. Yes I am a chef but as an owner my responsabilities are much more involved than production. Fact is if I could make the kind of money I do washing dishes my life would be very calm and easy.
     
  7. panini

    panini

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    I'm not so sure you're understanding at all. The owner should not draw a salary if he is not physically working? I'm not so sure I want to get into it with someone who has not worn the shoes. The risk is very high buying a food business. A lot of owners put everything on the line and can lose their investment,their families financial security, their parents funds,retirement, college tuition, etc.. The responsibilities of an owner are huge. The job of being profitable to make sure that all the employees get a timely paycheck so they can support their families, the bills paid,everyday worries, etc. is worth more then a salary. If the joint goes bust, you go find another job. The owner usually goes bankrupt./img/vbsmilies/smilies/biggrin.gif
     
  8. kingfarvito

    kingfarvito

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    I wasn't trying to be condescending by any means. I didn't mean to say that the owner shouldn't get money, it seems like it makes more sense to just take the profit (I realize that profit margins are slim in the restaurant world) all together instead. If I'm missing something here please tell me. I'm always looking to learn.
     
  9. panini

    panini

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    King,

    I didn't think you were condescending. I personally think you are missing something. But that's just me.

    Most times, buying a business is an investment. It's not a hobby. I just think an investment should generate income. I have had Disney stock for 40 yrs.+. It generates

    income for me, but that doesn't mean I don the Mickey costume and run around the park.

    I have a food business for that!/img/vbsmilies/smilies/lol.gif
     
  10. chefboyog

    chefboyog

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    The business profits are yours. You can draw a salary also but really it depends how you set up your business. Sole prop, joint partnership, or corp.

    Joint is best legally( refer to a lawyer please!) because it limits your liability. If your thinking about incorporating you wouldnt be here lol.

    I have a small catering business. I don't " pay" myself. I pay my employees and hopefully have money in the bank at the end of the day.
     
  11. panini

    panini

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    For some businesses a corp is beneficial. 
     
    Last edited: Jun 7, 2015
  12. chefboyog

    chefboyog

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    Sorry I was implying if you knew how to incorporate a business you would know how to structure the pay.

    Simple answer to OP: as much as possible!
     
  13. kingfarvito

    kingfarvito

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    Right, as part owner of the Disney corporation you're entitled to part of the profit the company makes. Just like if you own a restaurant you're entitled to the profit that come from it. I never said people shouldn't make money form owning a business. 
     
  14. youngchefkarl

    youngchefkarl

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    No more than 50% of the profit for an owners salary is pretty standard.
     
  15. chefboyog

    chefboyog

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    The other 50% goes to the owners spouse? Salary would be before business profit?
     
  16. youngchefkarl

    youngchefkarl

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    You're right, I was speaking on how to gauge the actual salary figure.

    Ex: restaurant does 1.2 million in revenue, 100,000 in profit. Salary should be 40-60K.

    If I'm wrong someone correct me.
     
  17. ed buchanan

    ed buchanan

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    In most cases there is no profit at the beginning. When there is it usually goes back into the business. If possible try and draw a weekly salary, as you are an employee of the corporation, put your wife on salary also if she helps .I  tried never to draw a profit as its taxed to death. Better to take it out in salary
     
    Last edited: Jun 8, 2015
    chefboyog likes this.
  18. panini

    panini

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    Well I think part owner is different then owner. I mean, I can almost see where you're coming from if the owner draws a salary and the business is undermanaged or understaffed or hurting  in any way. I used to feel the same way as you until I got a taste of ownership.
    Ed is spot on.

    I tried to avoid going there, but for some people , if in a corporate structure, it's best to pay payroll taxes. Corporate tax is the third largest form of revenue for the federal govt. behind individual tax and payroll tax. If I were to own a corporation, I would certainly draw a salary. The time spent not physically working , but dealing with the behind the sceen  corp. minutiae, is worth a draw. Just sayin.
     
  19. capecodchef

    capecodchef

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    Sorry, but it's the exact opposite of what you and Ed are saying. Pulling a salary, at least from a tax standpoint, is the worst type of income for an owner. It's always better to pass throufgh the profits if you are an S corp or even an LLC. And salary is going to be taxed 7.5 % for FICA plus the additional 7.5% FICA match, BEFORE the relevant income tax level. It will never be better than passing through the profits to the shareholder (you) and taxing at the prevailing rate. How in the world can it ever be better to pay the payroll taxes? Makes no sense whatsoever. Sorry.
     
  20. panini

    panini

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    OK
     
    Last edited: Jun 9, 2015