Episode 8

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Too many practice owners pay themselves whatever is left at the end of the month. That is not a compensation strategy. It is financial survival. In this quick tip solo episode, Brandon Seigel breaks down how to build a structured, intentional approach to paying yourself that reflects both the work you do and the investment you have made.

Brandon opens with a distinction that changes everything: as a practice owner, you have two distinct roles and each deserves separate compensation. As an employee, you earn a salary for the services or leadership functions you perform. As an investor, you earn distributions for the ownership stake you hold in the business. Conflating these two, taking a single draw when cash allows, creates tax inefficiency and financial instability.

The minimum viable salary is the starting point: the lowest stable compensation that covers your personal financial obligations while maintaining business stability. Ask honestly: if someone replaced you in this role tomorrow, what would they need to be paid? That number is a useful anchor. For benchmarking, resources like the MGMA compensation data can help calibrate your expectations.

Distributions are the reward for building the system that generates revenue. Brandon takes a monthly distribution to a separate personal account, with an annual distribution added on top. The key principle: distributions come from true profit, not from operating capital needed to sustain the business. He maintains a minimum operating reserve that is never touched.

Brandon describes a three-bucket framework for financial clarity: operating expenses, owner compensation kept in separate accounts, and profit reserve for growth and stability. As James Clear writes in Atomic Habits, a system beats willpower every time. Avoiding the numbers never improves them. If your practice compensation structure needs a review, WWMP's fractional HR services can help you build that structure.

Key Takeaways

• Pay yourself in two forms: salary for the work you perform, and distributions for the ownership you hold
• Your minimum viable salary should reflect what it would cost to replace you in your functional role
• Distributions come from true profit, not from operating capital needed to sustain the business
• Use three financial buckets: operating expenses, owner compensation, and profit reserve
• Avoiding your financial numbers never improves them. Create structure and commit to it monthly

"Profit is not the purpose of a business. But without profit, a business has no purpose."  -- Peter Drucker

Ready to take your practice to the next level? Contact Wellness Works Management Partners today.