Why this eyewear entrepreneur started paying herself differently

In the midst of last year’s tariffs on Canadian goods, Winnipeg-based KayTran Eyewear had to pause its U.S. business for several months. Roughly half of the company’s revenue disappeared “within an instant,” says founder Kathy Tran-Riese.

It was a reminder for her that there are no guarantees in business. A company can be a great asset if you “strike it lucky,” she says, but there are also many that shutter their doors every year. “What it is today could not be what it is when you retire, and that runway for me is 25 years from now.”

KayTran designs low-bridge-fit eyewear. “I’m Asian, and struggled my whole life finding glasses that fit me properly because of my facial features,” says Ms. Tran-Riese.

She developed the idea for KayTran in 2010 while completing her MBA. By 2012, she launched the business, running it alongside a career in finance. Around nine years later, she left her corporate job to work full-time at KayTran.

In its early years, Ms. Tran-Riese packed orders out of her basement. Today, the company has a marketing team of approximately five, as well as employees working in its Winnipeg warehouse and a U.S. distribution centre.

Ms. Tran-Riese opened the U.S. facility late last year to both tackle trade uncertainties and be more strategic about customer growth. She couldn’t absorb the tariff costs, so having distribution in the U.S. allowed KayTran to ship to customers there domestically and more affordably – “at a price point that was fair to them and consistent with our brand,” she says.

The decision helped KayTran to mitigate future uncertainty and deliver better customer service, and also enabled them to open up wholesale partners in the U.S.

Like many entrepreneurs, Ms. Tran-Riese initially assumed her personal wealth would be linked to the value of her company. “This is your nest egg,” she says. The experience with tariffs convinced her that KayTran couldn’t be her only asset. “It has to be part of a more cohesive mixture of things,” she says.

Karen Craft, president of Ottawa-based advisory firm CraftXecs, says there’s no perfect balance between tucking away your personal savings and reinvesting into your company. Instead, she encourages entrepreneurs to think about the different “seasons” of their business. That extends from start-up, when much of the available cash likely needs to stay in the company, to a more stable period when the owner can withdraw more.

When KayTran became more stable, Ms. Tran-Riese faced a learning curve around taking money out. “When you first start, you don’t really think about your personal side, because you’re so focused on building the business. Every cent goes back into this.”

At first, the amount she’d withdraw fluctuated depending on the company’s performance, making it challenging to consistently save for retirement or budget personally.

Once KayTran hit its stride, Ms. Tran-Riese started calculating what she could reasonably and consistently take out.

Covering the family expenses that she contributes to is her goal for a minimum monthly salary. Then she looks closely at how the company’s cash flow will pan out over the year, factoring in warehousing, marketing, staff, production costs, outflows of inventory, new product launches and seasonality. When figuring out what to leave in the business and take out, she also wants to pay herself enough to have room for savings.

“I think you need to average it out because you can’t pay yourself a sustainable salary on your lowest cash flow months, and you can’t pay yourself an inflated salary based on your highest cash flow months,” she says.

Ms. Tran-Riese also tries to keep at least one month of cash set aside each month so she doesn’t run into a situation where the business runs into a working capital issue after accounting for her salary.

That extra buffer is critical. Ms. Craft cautions entrepreneurs against becoming too comfortable during a stable period. “You can go from being in this wonderful state – I’m making money, I’ve got my plan – to all of a sudden the carpet being pulled out from under you.”

To protect her long-term finances, Ms. Tran-Riese works with a financial advisor to build investments outside the company through registered retirement savings plans and tax-free savings accounts.

Her advisor also recommends that business owners pay themselves at least some salary, rather than relying entirely on dividends, so they can contribute to the Canada Pension Plan.

When it comes to creating a financial plan, Ms. Craft advises that entrepreneurs don’t go it alone. “Surround yourself with the right experts, so you can test your ideas and keep blazing the trails you need to blaze.”

KayTran is seeing year-over-year growth, and Ms. Tran-Riese has no plans to step away anytime soon. Raised by entrepreneurial parents herself, she enjoys showing her eight-year-old daughter parts of the business, including product design. “Obviously she’s not doing the final decision-making, otherwise everything would be pastel-coloured,” Ms. Tran-Riese jokes.

Over the next two decades, she hopes to expand KayTran into new product lines, while continuing to build her personal wealth outside the company. Paying yourself as an entrepreneur means overcoming a “psychological hurdle,” she says. “There’s a bit of guilt in doing it, but [it’s] very practical and useful down the road.”