Pay yourself a real salary on paper. A buyer will ask.
A lot of owners pay themselves very little on paper. Some take whatever's left at the end of the month. Some leave money in the business to look stronger, or to keep the tax bill down.
It feels like it makes the business look more profitable. To a buyer, it does the opposite.
What a buyer does with your salary
Buyers value home service businesses on a multiple of earnings. Before they apply that multiple, they normalize the numbers. One of the first adjustments is the owner's pay. CT Acquisitions' 2026 report lists "normalized owner compensation" among the standard adjustments.
In plain words: if you run the business, someone will have to be paid to run it after you. The buyer subtracts a market salary for that person, whatever you actually paid yourself.
Why underpaying yourself backfires
Say your books show $400,000 in profit, and you paid yourself $40,000. A manager who could do your job might cost $120,000. The buyer subtracts the difference. Your real profit, in their eyes, is $320,000.
Now multiply that gap by the multiple they're paying. That $80,000 isn't $80,000 off your price. It's several times that.
And it's worse if you didn't see it coming. You've been planning around a number the buyer will never pay.
Why it matters even if you never sell
A real salary on paper tells you whether the business is truly profitable, or only profitable because you work for half of what you're worth. That's worth knowing whether a buyer ever calls or not.
If the business can't afford to pay someone a real wage to run it, that's not a reason to hide it. It's the most important number to fix.
The add back list goes with it
The flip side: buyers also add some costs back. Personal expenses run through the business, one time costs and one off equipment buys can be added back to your profit, but only if they're documented. Keep that list every month, not the week before a sale.
What to do this month
- Ask your accountant what a manager to replace you would cost in your market.
- Compare it to what you pay yourself on paper.
- Start a running add back list, one line per item, with the receipt.
- Get your books reconciled monthly, in standard categories.
Here's what profit margin to aim for once your salary is in the numbers. The full protect it checklist is in our free playbook.
Not sure where your business stands yet? Our free Growth Ladder assessment takes about four minutes.
- The 2026 Home Services M&A Multiples Report (CT Acquisitions)
- Run It Like They Would, The Next Right Move (2026)
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