Don’t Fall For This “I Made Six-Figures” Scam

“I hit my first six-figure year!”

“Take my six-figure launch strategy!”

“How to grow from zero to six-figures.”

I see it everywhere. It seems like everyone is after this elusive six figures and the people talking about making their first six figures and how you can too is trending like crazy right now.

The frustrating part. Making six figures in sales or revenue is significantly different than making six figures in profit. And making more sales does not automatically equal more profit or money in your pocket.

Sales and revenue are a great thing. And they are necessary for running a successful business. Because regardless of your profit margin if you can’t make a sale your business won’t survive long.

Sales are a good indicator of whether or not you can expect your business to remain in business, but they are only the first level.

Selling $100k does not put $100k in your pocket.

Next you have to take out all your expenses and pay those. What you’re left with is your profit, which is the money that can go into your pocket for your own personal use as a business owner or be used to invest further in the business to help it grow or a combination of the two.

Please note: This is a very simplistic example. Some business owners would argue paying yourself is a business expense and profit is what’s left over after everyone including yourself gets paid. And there are many different forms of businesses, sole proprietor, partnerships, llc, corporations, etc. And each of those forms can come with very different rules as to how the owner gets paid.

However, I want to simplify the whole income vs. profit situation to give you the information you need to not fall for this “six figure scam”. I am all about not making things more complicated then they need to be. 🙌🏻😂

Business Coach Example One

In February, Mary* had a successful six-figure launch. She sold a total of $138,412 in her signature course. She is now going to use that framework to teach others to have six-figure launches.

And while Mary did sell six-figures, she also had some major expenses - totaling $98,537.

This means her profit, the money available after expenses are paid, was $39,875. It’s not nothing. That’s a perfectly fine profit. But it’s not six-figures in profit. And it gives her a 29% profit margin.

Business Coach Example Two

In January, Sally* had a successful six-figure launch. She sold a total of $101,327. She is now going to use that framework to teach others how to have six-figure launches.

And just like Mary, Sally also had some sizable expenses - totaling $60,431.

This means her profit was $40,896. It’s again a great profit. And it gives her a 40% profit margin.

Let’s Compare Mary & Sally’s Examples

 In both of these example, neither Mary nor Sally is marketing falsely. 

They both had a six-figure launch and have a very real potential of making six figures in profit by the end of the year. 

However, the profit margin is what you want to pay attention to. Let’s assume the profit margin stays about the same for each and they continue running this launch throughout the year.

Let’s also assume at the end of the year both Mary & Sally have each sold a total of $800,000.

Mary gets $232,000 in profit.

Sally gets $320,000 in profit.

That’s almost $100k more for Sally with the same amount of sales, because she had a higher profit margin.

Whose method would you rather have?

I’m not saying Sally’s course would be better than Mary’s course. They are both having successful years in my opinion. 

However, it does seem Sally has a better handle on watching her expenses, which may in turn help her students have a better profit margin as well in their business, because she will (hopefully) be teaching them all her strategies including how she saves money on expenses.  

However, you can learn a framework from a business coach and still manage your own expenses differently and have a higher profit margin than they do. 

And I’m not saying you should go around asking people what their profit margin is… 😅 because they probably won’t tell you. 

But I am saying do not assume business owners are “rolling in the dough” just because they have a six figure launch. Do not use that as your measuring stick of whether or not a course will help you.

*All names and events are fictitious examples. Any similarity to real people or events is coincidence. 

What’s Next?

Making six figures in sales or revenue is significantly different than making six figures in profit. More sales simply does not equal more profit.

Sales are a great indicator of whether or not you have a successful business idea, but profit margin is the indicator of whether or not you can expect to remain in business.

At the end of the day if you’re making $1,000s in sales but barely making a profit after costs are paid (or worse loosing money after costs are paid) your business will not survive long.

Long story short… when some business guru is claiming they made six figures and they can help you do that too. Make sure they are teaching a framework you are okay with, because while your business will not have the same profit margin as they do, you want to be sure you are learning from a business coach who has set their business up in a way that is successful and is running their business in a way you would be happy trying to replicate.

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