How high should my start-up salary be?

One of the most frequently asked questions when setting up a company is: "What am I actually paying myself?"
The founder's salary is a sensitive issue - too high and it jeopardises your liquidity, too low and it can threaten your motivation and even your private existence in the long term.

In this article, you will learn how to realistically determine your start-up salary and which factors you should take into account.

Many founders tend to pay themselves no or only a very low salary at first. But they do:

• • Your salary is part of your Financial planning and signals professionalism to investors.
  • It ensures that you concentrate fully on your business without financial existential fears.
  • It influences your Quality of life - and your performance as an entrepreneur.

1. Cost of living
   • • What monthly fixed costs do you have privately (rent, health insurance, living expenses)?
     • Tip: Create an honest overview of your minimum costs. This is your lower limit.
2. Financial position of the company
   • • How much turnover do you expect?
     • What reserves do you need for growth and unforeseen expenses?
     • In the initial phase, your salary is usually lower than in later years.
3. Industry and type of foundation
   • • Tech start-ups often only pay founders symbolic salaries because the capital flows into growth.
     • For traditional start-ups (e.g. trades, services), start-up salaries in line with the market are common.
4. External expectations
   • • Banks or investors want to see that your salary is realistic - not excessive, but not unrealistically low either.
     • A solid founder's salary shows that your business is sustainable in the long term.

Minimum:

Cover your private fixed costs first - rent, health insurance, living expenses. This allows you to work without constant financial pressure and concentrate fully on your business.

Note: These figures are intended as a guide. Salaries can vary greatly depending on the industry, company model, region or financing situation. Tech start-ups, for example, often pay lower salaries at the beginning in order to invest capital in growth.

Flexibility:

Consider whether a variable model for your founder's salary makes sense, e.g. a basic salary plus bonus payments as soon as certain sales or milestones are reached. This will keep you flexible and motivated without jeopardising the company's liquidity.

• • Salary too lowSounds like a sacrifice, but it quickly leads to stress, side jobs and less energy for the company.
  • Salary too highBurdens liquidity and appears unrealistic to investors.
  • No adjustmentYour salary should develop in line with the growth of the company.

Your founder's salary is a balancing act between financial security and Corporate reality.
It should be high enough to cover your living expenses - and realistic enough to allow your company to grow healthily.

Tip: Include your start-up salary in your financial planning right from the start and review it regularly. This will keep you flexible and avoid unpleasant surprises.

Calculate your founder's salary systematically!
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