The fair market wage concept is the single most important number in your business.
If you replaced yourself with a hired manager, what would you have to pay them? Now subtract that from your take-home. The result is your real profit.
Most owners never do this math. They look at their bank account and call it profit. But that's not profit — that's your salary plus your profit mixed together. When you go to sell, a buyer will pull the two apart immediately, and what's left after your fair market wage is the only number that matters.
## Why this breaks businesses
We see it constantly: a business owner pulls $250k out of a business that makes $100k in real profit. They think they're doing well. Then they try to sell and discover the business is barely worth the assets.
## The fix
Calculate your fair market wage first. Then calculate your real profit. Then run the business like the two are separate — because they are.