Who do you pay first ?

[FletcherTax]

What an interesting question Patrick, and even more interesting comments in turn.

I think it is crucial to contain a balance between funds you pay (or allow) for yourself and your own creditors. You need both to survive. One for you to keep kicking and one for your business to keep kicking (and in turn pay/fund you again).

As a suggestion, if cash flow issues arise, it is always best to notify your creditors as soon as default is sneaking up and request extensions or at least keep them in the know. As mentioned by various people above, without your creditors trusting that you will fulfill your end of the deal - you will simply not be able to trade with them again nor be availed to any special discounts, or extended terms and conditions.

[melbstrip]

Thankfully my business has few regular overheads, but the main one is telecommunications. Not just the phone, I also use a desktop messaging solution provided by Telstra. Even during the slow winter months the accounts come first. With no communication I have no business.

[kylieshort]

I pay my employees first, then my accounts and then myself. Just the way I've always done it.

[MikeFromEngageMarketing]

I pay accounts before I pay myself and I pay small businesses before I pay big businesses

[bla]

Pay payroll first, then I try to pay ever suppliers. Which depends on my customers paying there accounts on time.

[Steve Fitzpatrick]

I think there's a school of thought that says pay yourself first (Robert Kiyosaki also recommends this) - how in practicalilty that works would be different for each business model.

The main things i would suggest to all business owners is to always look after your stakeholders - without them you have no business.

[Abacus]

I pay Us first. the $$ figure to pay is simply the award wage of the job.
ie: Hubby is a security screen installer in the marketplace he is "worth" a minimum of $x
I am an Admin assistan to a small security screen company I am worth $x (per hour)

While I agree that suppliers need to be paid (and they are)... I have seen the frustration of small business owners flogging themselves into the ground for no $$. If your business is not capable of paying you the minimum wage for what you do, then I'm sorry, but you don't have a business

Sure in the startup phase it may be tougher, but with a well defined start up business plan and some decent back up capital you should have a viable business. (We had 6 months of hubby's wage as backup) If you have not come up to speed by the time your "back-up funds start to run out... you probably need to face facts and go get a job

In the startup and growth phases of Abacus Screens, I had to continue working to top up the "minimum wage" that Abacus was able to pay to hubby.
I also took the stance of employing "productive" staff before me (Our fitters came before I "employed" myself ie: when I left working for someone else - Admin Staff don't create $$ like fitters/quoters do )

AFTER all bills have been paid, ( Us, wages, suppliers, loans ) THEN I may draw out some extra $$

[MihadAli]

I always pay everyone else first and if there isn't enough for me I wait.

[madebetterbiz]

Good old fashion business ethics are to pay your suppliers first, somehow many have bought into Robert Kiyosaki's Rich Dad Poor Dad ideology to pay themselves first, which I believe is outright wrong!

[jeflasley81]

pay people and yourself whats due to them and to you. it is as simple as that.