Pay yourself a Salary? Need some advice

[Greg P.]

Hello, could anyone tell me when you would want to pay yourself a salary? I'm thinking about doing a wholesaling business partnership where we would both get paid salary and 50% of the business. Would this make any sense or is it just better splitting profits 50% without a salary?

Thank you very much.

[Ralph S.]

Over time, it will be impossible for both partners to equally contribute, and sooner or later one (or both!) will feel the simple 50/50 split is not fair.

If the agreement recognizes some form of reward based on the individuals contribution, there is at least a chance that these feelings can be avoided.

When conteplating any partnership, just be sure to consider all the possibilities up front. Hope for the best, but plan for the worst. Have contingencies and an exit strategy up front that will cover all the things life can throw at you.