Restaurant Owner Pay… How Much Should You Actually Take Home?

So picture it like this.

What we're going to talk about right now is called net free cash flow.

It's probably a term you may have never heard.

But if you have, awesome.

It is different from free cash flow, which is an accounting term.

but it basically just calculates net profit minus any like liabilities and things on your balance sheet.

So that's get paid out, which, which is an important number, but net free cashflow takes that.

And then also factors in a couple other things.

So let's just, let's go through this together.

Okay.

I want you to picture a pipe because we've all had pipes running into the restaurants.

And so just picture at one end, you've got all the sales that come into your business.

And then on the other end, You've got the money that you as an owner get to take home.

And I don't want you to get this confused with your salary that you pay yourself because most owners consider their salary as profit.

But here's what we want to make sure we do is that actually artificially rigs the financials.

Because like for me, I used to underpay myself, right? Like I would be doing a GM position, which should get paid a certain amount, but I paid myself like just enough.

because i wanted to keep more cash in the business so i wasn't doing that well so i underpaid myself right so me underpaying myself and paying half of what you know i should have paid a gm which is the role that i was doing you know that put 40 grand in quote unquote profitability into the business when in reality it was just phantom profitability because as soon as i removed myself you know, and had to have someone else there, the business would drop in profitability.

And that's why a lot of owners actually when they're working a lot themselves and then they actually get people there, they're like, man, my profitability went down and my labor costs jumped up and like, actually, it didn't.

You were just volunteering for your business and you can't build a business of unpaid labor.

So I want to make sure we're clear on that, that we're not talking about your salary.

We're talking about, you know, you should be paying your salary for the job that you're actually doing.

Excuse me.

And then this is the profit that we take out at the end, right? After all the things are paid.

All right.

So we're starting to the very front where all the revenue comes in just for easy math.