When Beauty And Wellness Brand Founders Start Paying Themselves—And How Much

In this edition of Beauty Independent’s ongoing series posing questions relevant to indie beauty, we asked 15 beauty and wellness brand founders: At what point in your business did you start paying yourself? Why then, and what amount? We also asked three investors to share their thoughts on when brand founders should pay themselves and how much they should earn.

Connie Lo Founder, Three Ships

We started Three Ships as a side hustle in March 2017. At the time, we worked other full-time jobs to save up money with the goal to take the leap to full-time with Three Ships. We decided that, as soon as we had saved up enough for six months' runway (aka six months working full-time at Three Ships without drawing a salary), we would quit our other full-time jobs.

We were finally able to do so in September 2018. The funny thing is, we actually extended out the period without paying ourselves a salary for a full year. During this year without a salary, we were extremely frugal. I even recall we actually gave our skincare products as holiday gifts to friends and family that year!

We first started paying ourselves a modest salary of $2,500 CAD/month ($1,985 USD) in October/November 2019. We decided on this amount as it was enough to cover our rent, groceries and other basic living expenses, but not much more. The first time we paid ourselves felt like a total dream, even though we were making way less than we had been at our former corporate jobs! We increased our salaries again only in November 2020 after raising a seed round of $1.4 million.

Aaaisyah Abdulsalam Founder, The Renatural

I started paying myself six months in as we had a great launch and became profitable sooner than expected. I matched my previous intern salary which covered my expenses and allowed me to have a (very) small cushion at the end of the month.

Ju Rhyu Co-Founder and CEO, Hero Cosmetics

I started paying myself roughly six to seven months after launch and paid myself a one-third of what I could've been paid at a corporate job. I started paying myself because I wanted our company to be able to stand on its own two feet and paying salaries is a big part of that. Once the company started generating decent profits, the founders started paying themselves.

Lindsay McCormick Founder and CEO, Bite

I started Bite with $6,000 in savings in 2018, and we have bootstrapped the company to over $25 million in less than three years. That being said, I didn't start paying myself until 2019 and started with a salary of $60,000. It was just enough to cover my expenses because what was most important to me was keeping money in the business as we balanced extremely high growth without the padding of venture capital.

Cristina Nuñez Co-Founder and General Partner, True Beauty Ventures

I think the most straightforward answer is it depends. It depends whether the founder is a first-time founder versus a serial or wealthy entrepreneur, where the founder lives and the cost of living, if the company is generating revenue or profit, how much money has been raised to date, etc. The amount and the timing can vary on a case-by-case basis.

Generally, I think founders should try to find the right balance between paying themselves a reasonable salary that adequately covers their costs, while making sure this amount does not unnecessarily drain the business of cash and still incentivizes them to keep building the business—and their equity—in the long term.

Samia Gore Founder, Body Complete Rx

I started drawing a salary of $65,000 the second year in business. Although our company was making million-dollar revenues, it was completely bootstrapped and still is, so many of our revenues are invested right back into the brand to help it grow.

Tina Bou-Saba Co-Founder and Managing Partner, Verity Venture Partners

This is a delicate area because founders’ personal circumstances vary tremendously. For a bootstrapped company, it’s really up to the founder, depending on whether the business is profitable. Once a company takes on outside capital, typically I see a founder/CEO take a salary that is reasonable for the company’s stage.

Frequently, the founder is not the most highly paid employee in a venture-backed company. I often see key senior hires receive higher cash comp, reflecting the fact that the founder will usually have significantly more equity than anyone else. This risk-reward alignment is critical. Of course, it’s important that the founder be paid appropriately so that they can live a reasonable lifestyle while they are running the business!

Jamie Norwood Co-Founder, Stix

My co-founder Cynthia Plotch and I worked on Stix on the side so we could keep our full-time jobs as long as possible. We knew it would be time to go full-time once we were able to pay ourselves enough to cover our basic living expenses. After about six months of juggling our full-time jobs and Stix on the side, we took the plunge and went full time on Stix. We paid ourselves about a $30,000 annual salary each at first.

Samara Walker Founder and CEO, Àuda.B

To be transparent, I don't pay myself at this stage of the business. I've used my personal savings over the past six months after transitioning full-time to Àuda.B. Solely out of necessity, I paid myself a stipend of $1,900 once during this transition period, which was used for rent.

We are currently still bootstrapping, but actively seeking investors. Once we finalize an investor, I 100% plan on paying myself a livable salary to be in a healthy and safe environment while building Àuda.B. Too often, startup founders who don't come from wealthy backgrounds sacrifice their mental health and stability to build their dreams without having a financial support system to fall back on. Then, we are left in dire situations. I have made a commitment to myself and Àuda.B to thrive despite the odds, so stability isn't up for negotiation.

Elizabeth Edwards Founder and Managing Partner, H Venture Partners

This is such a personal question because every founder is in a different situation—kids in college or not, earlier in career or not, partner that also works or not, etc, etc. So, my view is that you should start paying yourself only what you need when you can afford to do so.

Entrepreneurs have a tough choice to make: take a dollar "out of the register" to pay themselves or reinvest that dollar to grow the brand. So, it really comes down to the ROI on that dollar.

Monica Watson Founder and CEO, Berlin Skin

We recently celebrated five years in business, and I just started paying myself a salary this year. That may seem like an eternity to some people, but, for me, I have always had the long game in mind. I've taken the slow-growth model so that we can build strong relationships with our retailers and pivot quickly from mistakes.

Up until this year, I essentially reinvested every penny we made back into the business because I believe in it that much. For the first three years, I worked a full-time job in marketing while building Berlin Skin. While it can be tempting to take on investment early on in a startup, I think there are a lot of great lessons to be learned through bootstrapping a business solely on your own. And yes, those paychecks are that much more rewarding!

Amy Saba Founder and CEO, SoHum

SoHum launched less than a year ago, and I have yet to pay myself. I said that I would give it at least a year before I started collecting a paycheck. I wanted to ensure there would be no roadblocks to scaling and, to me, that meant keeping as much money as I could in the business bank account.

It’s hard to put a price on my role as chandler, marketer, shipper, bookkeeper and sales associate, but I know that collecting a modest paycheck in the near future will be crucial to the continued growth of the business.

Tiila Abbitt Founder, Athr Beauty

Since Athr Beauty is self-funded, paying myself was not a priority since cash was needed to grow the business. So, every penny went right back into growth. However, since we have grown so much in 2021, I finally was able to start paying myself as well as hire four other full-time employees after only having myself and one employee for over two years, although I'm probably the lowest paid CEO out there, lol.

Elizabeth Egan Co-Founder, Dally

We launched Dally less than a year ago and have bootstrapped it the whole time, so finances are always top of mind for us. We haven't started paying ourselves yet and likely won't for a while because we want to invest that money right back into the company to propel its growth. Bootstrapping means slower growth, so we're taking that tradeoff to build something for the long run.

Jessica Morelli Founder and CEO, Palermo

Any founder will tell you that, when starting a company, you have to expect to make sacrifices, and one that almost every business owner makes is in how much they get paid. For the first two years of running my business, I worked three part-time jobs to support myself so my business didn't have to. I reinvested every dollar and even hired my first employees before paying myself.

Then, for the following three years, I was the lowest-paid employee at our company, sometimes going months without paying myself. Although it felt necessary at the time, it eventually degraded my relationship with my business. I felt resentful, and it ate away at my confidence and self-worth.

Five years in, I learned, if I was to continue running my business effectively, I needed to adequately value myself and my role at the company. I now pay myself about half of the salary I would demand in the market, but I'm at least making enough to support my lifestyle and save a little. As a cash-strapped startup, it feels understandable and sometimes necessary that the founders work for free, but that's not sustainable and definitely not why you started your company to begin with.

In terms of how much, each business really needs a budget before deciding expenses like salaries. What can the business afford and for how long? What other expenses are you willing to cut to make your desired salary possible? The answers will be different for everyone, but the questions are the same. Now, anytime I consider skipping my income I stop and look at what else can be cut first outside of my team's payroll.

Joni Rogers-Kante Founder and CEO, SeneGence

The first nine months—April to December 1999—produced $1.7 million dollars in product sales. At the end of month one, I collected $100 per week to purchase groceries. Month two, $200 per week; month three, $300 per week; and so on until, by year-end, I earned $1,000 per week. The earnings allowed for me to rent a house for my son and me to live in on our own. By year two, product sales rose to $3.8 million, which allowed for a steady, modest monthly salary for myself and three or four full-time employees.

Iris Cherng Founder and CEO, Honey Belle

It's so important to pay yourself as a brand founder, but, without outside investment, it can feel so challenging. As a small business owner, it feels as though we need to put our business first and, ultimately, because of that we eat last, which is what I tend to see in many small businesses.

I started putting myself on payroll about nine months after I incorporated. I started with a small amount, a whopping $400 a month, but that was a start! From there, I increased it gradually to $800, $1,200, $1,500, $2,000, and so forth. It wasn't until I started paying myself and treating this business like a job that the business started paying me like a real employee.

Paying myself and making that a priority allowed the company to blossom into an actual, revenue-generating, bill-paying, health insurance-providing business that allows me to thrive and do what I love.

Sahar Saidi Founder, LUS Brands

I started paying myself five months after I launched the company. LUS officially launched in January 2017. I started paying myself in May 2017. That's when I started to see decent sales come through—we had two consecutive $10,000-plus sales months—and, in all honesty, it was the first time I wasn't worried about having to claim personal bankruptcy after investing everything I had in this company.

As to how much, I paid myself a whopping salary of $30,000/year (and that was in CAD!). I mean, we were starting to make money, but not enough to justify market pay for myself. Plus, I had hired two independent contractors at the time, and it was more important for me to pay them than to pay myself.

The first time I started paying myself what I would consider market rate—and probably still way too low for market CEO salary for a company our size—was six months after I had completed the Y Combinator program and raised our $1 million seed round. By that point, I was sure that we would have eight-figure sales year the following year and could justify paying myself appropriately. So, [that was] almost two years post-launch.

If you have a question you’d like Beauty Independent to ask beauty entrepreneurs, please send it to editor@beautyindependent.com.