Whether you are the manager of your business or you hire someone else for that role, you need a clear compensation structure for that position. Matt and Rick discuss 3 different scenarios and the best practices for manager compensation for each.

The first scenario we talk about is the owner-operator, where you are most likely in the management seat as the owner. This might be as the Director of Training or as the General Manager. In this scenario, you’ll have to pay yourself a salary just like you’d do if you were employing someone.

If you pay yourself a salary as an owner-operator, it will become much easier down the line if you wish to scale to multiple locations, quit the day-to-day operations, or even exit the business. The business model will be strong enough to pay for someone else to execute your role.

In most cases, this isn’t the case with many owner-operators. They are not accounting for the expense of a manager and just take profit distributions. This can give a wrong impression about the profitability of your business. If you can’t pay yourself as a manager and realize a profit, it’s not a good thing for your business.

Listen in for the other two management compensation scenarios Rick and Matt discuss and how to structure them to maintain the health of your business.

Key Takeaways

• How the compensation structure works in an owner-operator model (02:57)
• What paying yourself a salary says about your business (03:55)
• Best manager compensation practices for a semi-absentee owner (07:01)
• Should you pay the manager a performance-based bonus (08:37)
• How does a full-on absentee investor structure manager’s compensation (10:23)
• How to create a feeling of ownership with your managers (12:07)
• 50/50 partnerships management structure (14:17)

Additional Resources:

• www.AlloyPersonalTraining.com
• Learn About The Alloy Franchise Opportunity

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