When founders should start taking a salary

Three considerations for becoming an employee of your natural products startup CPG brand.

Jennifer Barney, Principal

November 16, 2022

3 Min Read
ennifer Barney is an advisor and consultant to food and ag businesses at 3rd & Broadway.

Many of you are working hard to grow your businesses and have been doing so for free. You've been reinvesting all profits back into the business in order to grow. When should you consider paying yourself a salary?

Taking a salary is different than taking a distribution of profits. Salaries are expenses. But beyond implications to the P&L, taking a salary begets other considerations. Namely, source of funds and a defined role. It is normal to build founder salaries into use of funds when raising. Investors will want the relationship between the founder and the business clearly defined (and no, just saying you are the CEO is not clearly defined enough).

You'll need to draw up an employment contract between yourself as an employee of the business you own.


Investors and lenders want to know the founder is contractually obligated to serve in the company when drawing a salary. When you think about it, this is only fair. You birthed the company, you got it to where it is now, therefore your backers want to know that you can be counted on to see it through.

Define your role

Because you've been running practically everything since inception, sometimes it's hard to know what role you should take. Founder strengths usually fall into one of two camps: creatives or operators. Know which one you are and own all the responsibilities that roll up into your purview when writing up your employment contract.


The other reason to establish your role and responsibilities is for company culture. Thus far you've only needed to be accountable to yourself. You set your own schedule. You work when you want. As the business becomes more complex, you'll want an internal ecosystem that works in harmony, and the way to foster that is to make yourself accountable to other people. Don't fight this.

Accountability looks like this:

  • Share your calendar so your people know when you are available.

  • Set regular check-in times to discuss high-level topics.

  • Do these regular check-ins even if you are talking to the other person regularly (because there is a difference between tackling the day-to-day with someone vs touching base on strategy and goals).

  • Set boundaries to keep your and everyone else's sanity (like, no weekend emails for example).

Burn out

If all this sounds scary to you, I get it. I too had the fear of losing my autonomy when I first brought on employees and I struggled with knowing when to pay myself. If you resist the accountability piece and forgo a salary, you'll get the opposite of what you intend: burn out. By leaning out instead of in you are sending the message that you are not reliable and your people will behave in similar fashion, causing more work for you.

If you are a founder, start thinking about which role you will play as a working member of your team beyond the title of CEO. Start by identifying your competencies and then imagine filling in areas of weakness. What help do you need to bring on to complement you?

Jennifer Barney is an advisor and consultant to food and ag businesses at 3rd & Broadway. She previously founded the almond butter brand Barney Butter.

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About the Author(s)

Jennifer Barney

Principal, 3rd and Broadway

Jennifer Barney is a CPG industry expert with deep startup roots from founding and building her own almond butter brand, Barney Butter. Jennifer melds classical brand marketing training with practical tools for startups so that small brands can get off the ground and be investor-ready.

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