As the owner of a business, you may face opportunities to decide whether to pull more money out in the shorter term or to maximize the longer term value by keeping more money into the business.

There’s not a right or wrong way that fits all particular situations. It comes back to the classic business school answer of "it all depends".

What doesn’t work though is where money has been taken out in the short-term and the company is being starved on the longer term basis. The company may not have some of the dollars tucked away that it could really use to maximize it’s growth and help with some of the funding, such as for working capital. Sure, you can be able to utilize a bank for a good portion of it, but usually not all, so you want to make sure you have enough covered for any growing needs.

Another factor can be the element of risk. By maximizing short-term compensation each particular year, be careful that at least a buffer is being left in the business. Otherwise, you may be betting the farm every year on how the company is going to do and one rough year could send you into a tailspin that could be tough to recover from. By pulling money out every year to the maximum, you’re taking on a certain amount of additional financial risk.

You have to weigh how much operating risk is there in your business, how stable are your revenues going to be over the next couple of years or if growing, is the growth well assured. If things are fairly certain within your business, then you can feel more comfortable pulling more money out. In other words, you have low operating risks so you can take on more aggressive financial risk. The key is to do what fits your particular situation.

It’s a balancing act. Take what you can out in the short-term, but protect yourself too over the longer term. Make sure you have enough coverage to be able to keep in the game for the long-term or that you have backup on your personal resources, so if you needed to in the short-term put more money back into the business on a short-term basis to cover yourself. Keep in it for the long haul.