©Shutterstock Asian farmers in the farm raise chickens and sell eggs. An Asian woman is carrying eggs and is happy to order and sell eggs online.
I know you might be saying this in your head, “I want to save money and grow my farm but PKOM is telling me to draw a salary from it – WTF!” But please, hear me out first. What you must understand is salaries are part of business expenses. I believe you understand that poultry farming can be pretty labour-intensive so whenever you are preparing your budget, you must make sure to include salaries even if you are the sole worker.
Benefits of drawing a salary
- It provides you with a decent standard of living in the early stages: Wow! I need to eat and also a place to stay. Visionary! PKOM! Very Visionary! Enough of the sarcasm. Yes, I agree it is obvious that these necessities must be met to survive but it will shock you how many new farmers try to cut back on certain necessities in a bid to increase profitability. My brother, my sister it is far better to draw a salary of GH₵ 1,000 per month and break-even than to go without a salary and end up with GH₵ 1,000 profit.
- It helps you manage your finances better: This is where drawing a salary can actually help improve your farm’s profitability. Let’s assume you take a salary of GH₵ 1500 per month from your farm’s coffers. Since you know you have a fixed amount of money to spend every month, you do not indulge in reckless spending hence your business is almost always in good financial standing but when you don’t set a fixed amount of money to spend every month, it is very difficult to keep track of the money flowing out of your business because you may have seen a nice dress which costs GH₵ 100 so you immediate withdraw money from your farm’s account another time, you hear of the release of the latest I-phone so again you withdraw money. This can go on and on and if not checked, you may ruin your business and may not even realize where all that money went.
Conclusion
Even if you are taking out a loan to start your business, allocate some portion of it to pay your salary because it is also a business expense. Also, I believe that drawing a salary will help your farm in the long run because you will learn how to separate personal expenses from those of your farm.
Pkom 