Your Wage is NOT Your Profit – Understanding the Difference
Many tradesmen make the mistake of thinking their wage is their profit, but this mindset can hold your business back. Your wage is what you earn for the work you do—whether as a tradesman on the tools or a director managing the business. Profit, on the other hand, is your business’s reward for running efficiently and successfully.
Profits should be reinvested into growth, this could be adding systems to buy back your time, hiring people to do the jobs you don’t want to (like Tradecoach VA!) saved for future expenses, or taken as dividends—separate from your wage. Understanding this difference ensures your business remains sustainable and profitable long-term.
Whether you pay yourself £500 or £3,000 per week that is your WAGE for all the stuff you do day to day – Your dividend at year end is your reward for having the balls to start your own business, for the late nights and early mornings and everything else our industries throw at us!
Are you treating your wage and profit separately? If not, it’s time to start.
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