There’s a frustrating place you can get to in business where things look like they’re going well…

but you still don’t really feel like you have money.

Clients are paying you.

Revenue is coming in.

Your business is growing.

Yet every time you go to pay yourself, you hesitate.

Can I actually take this much out?

Then taxes are coming up. A few larger expenses hit. Next month looks slower than this one.

And suddenly the money you thought you had doesn’t feel like yours anymore.

If you’ve ever looked at a business that’s bringing in decent revenue and wondered, “Why does it still feel this tight?” – this is probably part of the problem.

You don’t just need a revenue goal.

You need a plan for what happens to that revenue once it arrives.

Because your business needs to do more than pay its bills.

It needs to cover expenses, prepare for taxes, build reserves, and pay you.

Yes, you too.

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Start With the Number Your Business Actually Needs to Make

A lot of business owners set revenue goals because the number sounds good.

“I want a six-figure business.”

“I want to make $10,000 a month.”

“I want to hit $150K this year.”

Okay.

But why?

If your goal is $10,000 a month and you haven’t figured out what needs to come out of that $10,000, the goal doesn’t tell you much.

Start from the other direction.

What does it cost to run the business?

What do you need to pay yourself?

What are you setting aside for taxes?

How much do you want going into your business reserve?

Do you have debt you’re paying down?

Are there upcoming investments you’re saving toward?

Those numbers should help create your revenue target. Not the other way around.

This connects directly to something we talked about in our Goal Forecasting in Business post. A goal becomes much more useful when you can explain how the numbers underneath it are supposed to work.

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Let’s Put Some Real Numbers Behind It

Say your business brings in $103,000 per year.

That works out to roughly $8,583 per month in revenue on average.

Now imagine the business has around $4,700 in monthly operating expenses.

Software, insurance, marketing, bookkeeping, supplies, contractors… whatever running that particular business requires.

You’re already down to roughly $3,883.

And we haven’t talked about taxes.

Or your pay.

Or savings.

Or the laptop that decides to die on a Tuesday morning.

This is where I want business owners to stop and really look at the numbers.

Because $103,000 in revenue can sound pretty good until you start asking what that $103k actually needs to support.

And if your business is seasonal, even that $8,583 monthly average can be misleading. You might bring in $8,500 one month and $5,500 the next.

That’s why cash flow planning matters so much.

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Please Stop Paying Yourself Whatever Is Left

I’m going to be a little more direct about this one.

You should not be the last bill your business pays every month.

I see business owners do this all the time.

Everything else gets paid first.

Software gets paid.

Contractors get paid.

Subscriptions get paid.

Everyone and everything gets their money.

Then the owner looks at what’s left and thinks,

“Okay… I guess this is what I will get this month.”

No.

Your pay needs to be part of the financial plan.

Now, that does not mean pulling whatever amount you want out of the business regardless of whether the numbers support it.

It’s actually the opposite.

Decide what you realistically need to earn from the business, then figure out whether your current revenue and profit can support that.

If they can’t, you have information you can work with.

Maybe pricing needs to change.

You need more clients.

An offer isn’t profitable enough.

Expenses are too high.

Your capacity doesn’t support your revenue goal.

Or maybe the business simply isn’t at the stage yet where it can pay you what you’d ultimately like to earn.

That’s okay to acknowledge.

What I don’t want is for you to keep saying you want to pay yourself $4,000 a month while operating a business that can realistically only support $2,000 and hoping it’ll somehow work itself out.

If the business can’t cover its expenses, prepare for taxes, build some reserves, and properly pay you, your revenue target needs another look.

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How Much Should You Pay Yourself?

Here’s where I wish I could hand you a nice little percentage.

I can’t.

Because your business isn’t the same as the person whose reel you just watched on Instagram.

Your pay depends on your business structure, profitability, personal expenses, goals, debt, growth plans, cash flow, and a whole lot more.

It also depends on how your business is taxed.

And this part matters.

A sole proprietor or the owner of a single-member LLC that’s treated as a disregarded entity for federal tax purposes generally reports the business activity on the owner’s individual tax return. A partnership handles owner payments differently, and partners aren’t employees receiving a W-2 simply because they work in the business. 

An S-Corp is different.

If you’re an S-Corp shareholder-employee performing more than minor services for the business, you generally can’t just skip payroll and take everything as distributions. The IRS requires reasonable compensation for services performed before non-wage distributions are made, and those wages are subject to employment taxes. 

Translation?

Please don’t decide how to pay yourself because somebody on Instagram told you what they do.

Talk to your tax preparer or CPA about your specific entity and compensation setup.

Then, from a cash-flow perspective, build that owner’s payment into the business plan.

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What About Taxes?

Here is another place where business owners get into trouble.

A payment comes in and the whole amount sitting in the account feels available.

It isn’t.

Some of that money may already belong to taxes.

For planning purposes, you’ll often hear business owners use something in the neighborhood of 25–30% as a starting reserve.

But please hear me on this:

That is a planning guideline, not your personal tax rate.

Your actual number can be higher or lower depending on your profit, business structure, state, household income, deductions, credits, withholding, and other factors.

The IRS uses a pay-as-you-go system, which means self-employed owners may need to make estimated tax payments throughout the year rather than simply waiting until they file their annual return. Sole proprietors may also owe self-employment tax in addition to income tax. 

This is one of those questions where I want you to go directly to your tax preparer and ask:

“Based on my business and our household tax situation, what percentage should I be setting aside?”

Get an actual number.

Then start moving that money aside as revenue comes in instead of hoping there’s enough sitting in checking when a tax payment is due.

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Let’s Go Back to Our $103k Business

Remember our business averaging about $8,583 per month?

Let’s say operating expenses average $4,700.

For illustration only, let’s use a 25% tax reserve. The actual tax calculation won’t necessarily be 25% of gross monthly revenue, which is exactly why your tax preparer should help establish your target.

Now you can start seeing why revenue and available cash are two very different things.

That $8,583 needs to help support:

Revenue: $8,583

Operating expenses: $4,700

Tax reserve: an amount based on the owner’s tax plan

Owner pay: planned, not whatever happens to remain

Business reserve: money intentionally left behind

Suddenly the question isn’t:

“I made $8,583. What can I spend?”

It’s:

“How much revenue does this business need to consistently support all of these things?”

Maybe $103,000 works beautifully for that owner’s expenses and personal needs.

Maybe it doesn’t.

That’s the point of doing this exercise.

You’re finding out.

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Your Business Needs Savings Too

This is the part people really don’t want to hear when they’re already thinking,

“Wait, I’m supposed to pay myself AND save money in the business?”

Yep.

Because eventually something will happen.

A client leaves.

Business slows down.

Equipment breaks.

A payment gets delayed.

You get sick and can’t work for a couple of weeks.

An opportunity comes along that requires an investment.

Your business reserve gives you breathing room when real life happens.

And I don’t think there’s one magic percentage that every business needs to save.

A photographer with highly seasonal revenue is going to have different needs than a bookkeeper with recurring monthly clients.

A business with employees and payroll has different obligations than a solopreneur working from home.

Look at your own expenses, seasonality, commitments, and risk.

Then start building a reserve intentionally.

Even if it happens slowly.

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A Great Month Doesn’t Mean You Got a Raise

This is a big one for businesses with inconsistent income.

You have an $11,000 month and think,

“Finally! I have extra money.”

Maybe you do.

But first, look ahead.

What does next month normally look like?

Do you have quarterly taxes coming?

Is there an annual insurance bill due soon?

Are you heading into your slow season?

Does the business reserve need some love?

This is why I don’t love owners changing their personal spending every time the business has a strong month.

Let the good months help support the slower ones.

If you know your business typically slows down every winter, part of your summer cash flow plan should be preparing for winter.

That’s not being overly cautious.

That’s running the business with your eyes open.

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Your Personal Budget Has to Be Part of This Conversation

This is where your business cash flow and personal budget finally meet.

If you have no idea what your household actually needs every month, it’s really hard to decide what the business needs to pay you.

Maybe you think $2,500 per month is enough.

Then you actually sit down and realize your household needs $3,400 from your income.

That’s important information.

It doesn’t mean you immediately start pulling another $900 out of the business.

It means you now know there’s a gap to solve.

This is exactly why I recently wrote about how your Personal + Business Budget needs to work together.

You can’t build your business numbers in one room and your personal finances in another.

Eventually, those two plans have to meet.

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Profit and Cash Aren’t the Same Thing

This trips up so many business owners.

Your profit and your bank balance are not interchangeable.

You can show a profit on your Profit & Loss statement and still feel cash-strapped.

Maybe clients haven’t paid their invoices yet.

You just purchased equipment.

A loan payment came out.

You took an owner’s draw or distribution.

Cash moved somewhere that isn’t showing up as an ordinary expense on your P&L.

That’s why I don’t want you running your business by opening your banking app and asking,

“Do we have money?”

Your bank balance matters.

Your financial reports matter too.

They tell you different things.

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Give Yourself a Monthly Cash-Flow Meeting

This does not need to become a three-hour event with twelve spreadsheets and a calculator.

Pour some coffee.

Pull up your numbers.

Give yourself 20 or 30 minutes.

Look at what’s in the bank today, what you expect to collect soon, bills coming up, tax savings, your upcoming pay, and anything unusual happening over the next month or two.

Then look a little farther ahead.

Is a slower season coming?

Are there annual expenses around the corner?

Does the business have enough cushion?

Are you on track with your goals?

And maybe the most important question:

Is the business currently producing enough money to support what I’m asking it to do?

If not, don’t panic.

Figure out which number needs to move.

That’s cash flow planning.

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💛 Young Wealth Tip of the Week

The next time a client payment lands in your account, don’t immediately ask:

“What can I spend this on?”

Ask:

“What jobs does this money need to do before it’s available to spend?”

Taxes.

Expenses.

Your pay.

Savings.

Future obligations.

Give those dollars their jobs first.

Then you’ll know what’s actually available.

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Your Revenue Goal Should Support Your Life – Not Just Look Good on Paper

A $100,000 business isn’t automatically healthier than a $75,000 business.

And a $200,000 business isn’t automatically putting more money into its owner’s pocket.

Revenue is one number.

What matters is what the business can actually do with it.

Can it pay its bills?

Prepare for taxes without panic?

Can it weather a slower month?

OR invest when an opportunity comes along?

and can it pay you?

Those are the questions I care about.

Because the goal isn’t to build a business that looks successful from the outside while you’re privately wondering why there’s never enough money.

The goal is to build one that actually supports you.

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Ready to Stop Guessing What Your Business Can Afford?

Cash flow planning gets a whole lot easier when the numbers you’re working from are accurate.

If your bookkeeping is behind, expenses aren’t categorized correctly, or you’re not confident in your reports, figuring out what you can pay yourself – or even what your business needs to make – is mostly guesswork.

That’s where Young Wealth Co. comes in.

We help small business owners keep accurate books, understand what their numbers are telling them, and build a financial foundation they can actually make decisions from.

And if you’ve been thinking about finally handing off your bookkeeping, don’t wait until year-end.

We currently have two onboarding openings remaining for September and two for October. After those spots are filled, we’ll be closing onboarding for the remainder of 2026. New-client pricing will also increase in 2027.

If you’ve been telling yourself “I’ll deal with the books eventually,” eventually is getting pretty close.

📲 Book a discovery call with us to claim one of our remaining 2026 bookkeeping openings before onboarding closes and new-client pricing increases.

Stick around, friend. Your next money breakthrough might just be one blog post away.

~Hannah & The Young Wealth Co. Team