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If you paid someone else to do your job, would your business still make a profit? Ben Hansen and Erick Loden work through the owner-pay question. They compare businesses with the same revenue and different owner compensation, then explain why a below-market salary can make reported profit look better than the underlying business. The practical question is what it would cost to replace the work…
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If you paid someone else to do your job, would your business still make a profit? Ben Hansen and Erick Loden work through the owner-pay question.
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They compare businesses with the same revenue and different owner compensation, then explain why a below-market salary can make reported profit look better than the underlying business. The practical question is what it would cost to replace the work the owner performs.
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