Should I Reinvest or Pay Myself More? – Ask Clay Anything

Business Coach | Ask Clay & Z Anything

Audio Transcription

Should you finally pay yourself well or should you reinvest in your business? When is it time to reap the fruits of your labor and when is it time to keep reinvesting in your business? Business coach Clay Clark breaks down everything you need to know about how much to pay yourself and invest back into your business during this addition of “Ask Clay Anything.”

Question – “While trying to grow how do you balance paying the business (reinvesting) and paying yourself. I’ve heard you talk about keeping a Warchest and not immediately spending too much into your business. I’ve also seen many business owners who run their business like a slum lord and are only taking out of their business. What is your rule of thumb for how much, what percentage, to reinvest into your business and also reward yourself along the way?”


  • Determine break-even point (how many transactions do you need per month to break-even)


      1. NOTABLE QUOTABLE – “Knowing your numbers is a fundamental precept of business.” – Bill Gates (Co-founder of Microsoft)


  • Determine the number of transactions that you need to achieve your goal


      1. NOTABLE QUOTABLE – “Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” – Dave Ramsey


  • Stay committed to your big goal
  • Buy a franchise disclosure document = $50,000
  • Pay for franchise related costs = $25,000
  • Enhance the call center = $15,000
  • Pay yourself per week based upon your proforma ($3.00 per haircut)
  • Automate the savings based upon your proforma
  • 5% of gross revenue for emergencies
  • Buy more insurance than I need


    1. NOTABLE QUOTABLE – “If you cannot save money, the seeds of greatness are not in you.” – W. Clement Stone (Legendary best-selling author and founder of the Combined Insurance Company of America, which provided both accident and health insurance coverage; by 1930, he had over 1000 agents selling insurance for him across the United States. By 1979, his insurance company exceeded $1 billion in assets.


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