Understanding Six-Figure Milestones

Are you chasing six-figure dreams but feeling lost in a maze of revenue, profit, and income? Join me, Dr. Sheena Howard, and uncover the nuanced realities behind those enticing six-figure milestones. Through candid examples and personal insights, I reveal how a business can rake in impressive revenue yet still be on shaky financial ground. This episode is packed with practical wisdom to help you set realistic financial goals, understand the true meaning of six figures, and avoid common pitfalls that can derail your success.

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Transcript

Speaker 1: 0:00

But of course, you can have a business that made $100,000 in revenue. But if you spent $90,000 in running the business, well, you only have $10,000 profit, right? So that's not a very good business. So that's revenue, right? Revenue doesn't mean you made that much. It doesn't mean you're taking home that much, right, you could still be broke. Your business could still be broke. I don't want my work to be stuck behind an academic paywall. I want to leave a legacy, I want to reach my potential and I want to change lives. This podcast, power your Research, is my attempt to help the smartest people in the world do that. Can you? My hope is that you'll apply what you learn here and one day join the Power your Research program where you can work with me one-on-one. We're talking about what does $100,000 mean, and I've had some revelations over the last couple of years that are kind of obvious, but I think I want to share them with you, because a hundred thousand dollars can mean different things, and I think getting clarity on the different meanings will possibly help you set goals, but also help you to ask better questions. If you join a coaching program or you hire a coach that promises you to make six figures or something like that. So there's three things I want to share. There's $100,000 in revenue, there's $100,000 in profit and then there's $100,000 in income. Let's say, after taxes or before taxes, it doesn't even matter, just $100,000 in income, even though those are two different things too. So $100,000 in revenue means that you have a business that made $100,000 in revenue. But of course, you can have a business that made $100,000 in revenue. But if you spent 90,000 in running the business, well, you only have $10,000 profit, right? So that's not a very good business. So that's revenue, right? Revenue doesn't mean you made that much. It doesn't mean you're taking home that much, right, you could still be broke, your business could still be broke. Second, $100,000 in profit. So $100,000 in profit is actually what the business made, right, after expenses, after all the expenses. So $100,000 in profit might mean your business had to actually make $200,000 in revenue so that you can have $100,000 in profit.

Speaker 1: 3:03

Hey, everyone, real quick. I don't run any ads on this podcast, so I have to rely on word of mouth. If this podcast has helped you in any way, please share it with a friend and follow me, dr Sheena Howard, on LinkedIn, where I give more free content on building your brand as an academic. If you tell me you came to my LinkedIn from the podcast, I'll make sure I accept your request. But even if your business makes $100,000 in profit, which is great, it doesn't mean that you take home $100,000. Because if your business is making that much money, you probably should be on payroll paying yourself as an employee.

Speaker 1: 3:42

And so that leads down to the third understanding of $100,000. So $100,000 in income would mean your business has paid you in a salary $100,000. Of course, you need to make more than that if you want your business to pay you $100,000 after taxes. Right, yes, after taxes. So there are different ways to understand six figures and while that is a great goal to have, when you're setting your goals and your intentions and you're looking at other business models and all that kind of stuff, you want to know what the six figures really means. Because I would imagine that if you want to make six figures, you're probably talking about making six figures in income, whether it's before taxes or after taxes, because that's probably a lot better than making $100,000 in revenue but only being able to pay yourself $10,000. So I, but only being able to pay yourself $10,000. So I hope this helps somebody out there and I would love to hear your comments or questions, so please leave them below. I hope you have an amazing day you.