slayer9019

Past business owner here. I'd suggest taking out a small percentage for personal savings as well as other investments. While you can easily net the most gain from investing everything back in the company, you really want to diversify if it goes down the tubes/takes a hit. Also, if your relationship ever goes south you won't get locked into the idea you HAVE to keep working together because literally everything is wrapped up in the company.

What we did was a quarterly financial review. While we didn't pull money out EVERY quarter, we tried to pull out something. It was a low as $400 one time and as high as 20k just to keep it consistent. Consistency is the key, small or large.

So, it seems that people kinda got it in the comments below but I guess I'll lend a longer explanation.

When you are growing a business (especially in the very beginning) you don't have established order, and rules. You also haven't figured out what needs capital to help grow, and how much you can take home as profit.

You DO want to not just turn the way of some small business I know who either 1) treat the business bank account like their personal account or 2) keep over investing into your company placing all your eggs in one basket. Both are very bad ideas for separate reasons.

A larger piece of advice (from experience) is to establish an order VERY early on so you can have predicable outcomes. Things like quarterly reviews for profit distribution, as well as reviewing performance, employee performance, etc.

Profits/costs are not constant until much later in the maturity of a company. That can be easily 10+ years out for these folks. Until you stabilize your costs and business, you really can't pull a steady income (salary+bonus). You CAN pull an income, just not your total income. Early on, there will be a predisposition to reinvest most of the money, mostly because you probably don't have much.

Generally, quarterly profit sharing grew from $0 early on, then gradually increased. There where times where we had used all of our profits for a major capital improvement which means no money that quarter. Even if you don't take money out you must still review why you didn't (lack of business or reinvestment, etc) otherwise you lose structure.