While not carved in stone, most small-business gurus would agree that a 10 percent net is a reasonable return on your investment, considering the risks of contracting. Earning 10 percent is better than you’d do with a money market account and probably better than most other investments these days, but here’s the catch: That 10 percent return has to be after you pay yourself a reasonable salary. Too many contractors take either the profit or the salary, but never seem to be able to earn both.
While not carved in stone, most small-business gurus would agree that a 10 percent net is a reasonable return on your investment, considering the risks of contracting. Earning 10 percent is better than you’d do with a money market account and probably better than most other investments these days, but here’s the catch: That 10 percent return has to be after you pay yourself a reasonable salary. Too many contractors take either the profit or the salary, but never seem to be able to earn both.

Since the day the first cave family hired someone to make them into a “hut family,” contractors have been struggling with the tough operational questions that go hand in hand with growing or running a business:

• When can I hang up my toolbelt and get out of the field?

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