Christians starting businesses for the glory of God.

How much money should a business owner make?

Business Owner

How much is too much? In the last section we explored how much profit is “too much” for a company and discovered that it wasn’t just about the amount of money generated but also about the percent of revenue that profit represented. There are two other questions about how much profit is appropriate. We will look at those here.

 

How much is too much for an individual?

It’s one thing to talk about profit margins and percentages for a company, especially a large one. However, the overwhelming majority of companies and businesses around the world are very small and mainly sole proprietorships. There are no stockholders who require a dividend and there are fewer demands for reinvestment. What then? If all the profit essentially flows through to the owner or partners is there such a thing as too much?

 

My answer to that question is “No.” A company, small or large, exists to generate profit and actually glorifies God when it performs as it was intended. Therefore, I would tell you that we should seek to generate as much profit as possible limited only by these factors:

 

  1. As long as we operate in a godly and honest way.
  2. As long as we pay a fair and competitive wage to our employees.
  3. As long as we don’t let profit become an idol.
  4. As long as we don’t let profitability become a source of pride and hubris.

 

Some companies will generate more profit than others, depending on how they are run and what industry they are in. There is no “right amount.” There is also no “wrong amount.” To a point, the more profit I make (given the guidelines above) the more good I can do with it. Remember, it’s not just about me becoming rich or living an extravagant life.

 

How much is too much for an owner vs. employees?

Many have tried to make this a moral issue, i.e. that the owner/CEO’s income should be a limited multiple of their lowest paid or average paid employee. Even the government (at least the US government) is trying to get in on this and establish some legislated formula for certain industries. I’ve heard numbers thrown around of 5 to 1 or 7 to 1. I have no idea where these came from, but just like how much profit is too much there is also no answer to how much more the owner should make than the rest of the company.

 

Here’s the reality. The owner(s) of a business carry the majority of risk. Therefore, it stands to reason and is consistent with Scripture to say that they should also receive the greater reward. Risk and reward go together. Always. The more risk the greater the reward. An employee has very little risk relative to the owner. It’s the owner’s name on the bank note. It’s the owner who gets hauled into court if something is faulty.

 

And ultimately, it’s not about how much the owner makes. It’s about what the owner does with what he or she makes. Money, like all of God’s gifts, is a stewardship to be managed for His glory in submission to His will.

 

Conclusion

So, if you are a business owner don’t get hung up in the “how much” question. Make as much as you can legitimately. Feel good about the profitability of your business in much the way you’d feel good about the growth of your family. Determine to be obedient to God in the use of profit.

 

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