Ep 73: What does a 6-Figure Income Actually Look Like?

 

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Dawn:

Welcome to episode 73 with myself, Dawn McGruer, talking all things marketing, motivation and mindset. Now in this particular episode we are going to cover what does a six-figure income actually look like? Now one of the things that is probably my biggest bugbear ever, is particularly in the online space and on social media, we see messaging. We see so-called entrepreneurs, gurus, et cetera, talking about figure incomes, six, seven, eight, nine-figure incomes.

 

But what does that even look like, and how is that going to impact your life? What level of income is the game-changer, and how do you even get to that point? Thinking about making an extra 100K a year may seem like a distant, pretty much unattainable dream, but it’s actually really possible to do if you make smart choices as you go along.

 

Breaking down the figures

 

Now in this particular episode, I want to share with you how you can break it down and what it actually looks like. Sometimes when we set a goal it feels really unconnected, because we don’t understand the steps. We don’t see or believe that it’s actually truly attainable. Now when you see people earning these money goals or these particular sums, I want to be really clear because what does a six-figure income actually look like? Well, it could be 100,000 pounds. Now that could be someone owning in it their role, or it could be someone generating that in their six-figure business. In a month you’re looking at an 8,000, or 8,334 pounds to be exact. So how do we break that down even further?

 

Well, let’s look at it, because in a week that means that you would be making 2,083 pounds. In a working day that’s 417 pounds. Now I’m rounding these up to the nearest decimal, but pretty much accurate. How does that break down to an hourly rate? Well, that’s 52 pounds an hour. When you hear someone talking about a six-figure income and it feels big, well, maybe it doesn’t, maybe you are at that point. But what does it actually look like? Well, it’s 52 pounds an hour.

 

The differences between income and wealth

 

Then look at your working day and let’s understand your charges. Now if you are in a salary role it’s hard to control what you’re obviously earning, you are in your own salary band, but it gives you an idea of what you’d have to be making as a salary to be a six-figure earner. If you own your own business however, this is really good for looking at your pricing. To really understand your worth, but also to understand what your wealth is. Because let’s be honest, when you see people talking about six-figure sums, some people are comfortable talking about money, some people don’t want to hear it, but what does it mean?

 

Well, a six-figure sum can start at 100,000, all the way up to just under a million at 999,999. So that’s a big, big difference. Now someone positioning themself as a six-figure earner, could be 100K or could just be under a million. Now that gap is vast. So when you are on your journey and you hear people talking about five-figure sums, six-figure sums, it’s a long journey to get to a million pounds. Now are they quantifying that in a year? Probably most likely. So when you are at six-figure, that means that you are earning just around about or just under a million pounds.

 

Now, the difference is, is that extra little step takes you into a seven-figure as soon as you are earning a million pounds. But how do you feel about six-figures? Does it feel achievable to actually add 1000,000 pounds to your income? One of the most common things that I’m asked is, “How do I charge more? How do I position myself to actually earn the money that I need to grow my business and lead the life I want?” You have to think about this, that income is one thing. Earning either 8,000 pounds a month or 80,000 pounds a month is all relative to what the actual profit is.

 

You need multiple revenue streams

 

Now I’ll be honest here, I have met lots of businesses, lots of entrepreneurs, who come to me who are earning 1000,000 pounds a month. Yeah, sounds a lot. But when we drill it down and actually look at the profit margin, you would be shocked to know just how many are making such small profits, that I know people who are earning far less but paying themselves far more. Now that may make you feel slightly better when you see all of this online, because for me, revenue is about vanity, and actual profit is where the sanity comes in. Let’s look at the differences between actual income and wealth.

 

Now your income is what you have coming into the bank. It doesn’t consider any of your outgoings. Whereas your wealth is your money you’ve saved over time or assets you’ve acquired. It’s your wealth around you, it’s a positioning. Don’t be disheartened if you are a new business or you’re starting or growing or scaling and you are not quite at that point. Even if you are earning 8,000 pounds a month, you are a six-figure earner.

 

Now one thing to bear in mind is when we broke down those figures and we looked at a 400 pounds each day, it means that your daily rate, to be a six-figure earner, has to be just over 400 pounds, 417 pounds. Now what you have to do is look at not every single day you are going to be delivering. If you are a coach or a consultant and you’re charging your time out, you are not necessarily going to be selling five days a week. You’ve got to work out how many working days or how many chargeable days there are to get to a point where you understand the maths of what you need to sell to make the profit to lead the life that you want.

 

Because the thing is here is that all of this comes with a degree of effort, a degree of time that’s put into it. But it’s also about your own goals, where you want to be. Some people will be quite happy being a six-figure earner for the rest of their life. Now that could be at one end of the spectrum at 100K or right up to just under a million. It doesn’t matter because this is about your goal.

 

Now when you think about your profit, this is where the magic starts to happen because in your working day, let’s say you were charging yourself out at, let’s say, 1,000 pounds a day, and you are working three days a week, and that was 3,000 pounds. Where is the rest of the income coming to? The initial goal for anybody who wants to make that step to six-figures has to be that you’re looking at 52 pounds an hour. That’s the money you have to be making. Now that could be through semi-passive, like memberships. It could be a combination of one-to-ones, maybe some online training courses, products, or services. There’s a whole scope.

 

But when you actually figure out what you’re going to be selling, you have to understand that this 8,000 pounds a month has to come from a balance of revenue streams, because you are never going to be in full delivery. You have to have some money coming in while you are working to keep this up. You might find that virtual PAs, they can multitask. They can do lots of different things at different times of day. And they can get to that point where they are generating 8,000 pounds, because they are working five days a week. But it could be from a consultant or coach’s point of view, that if their daily rate is 500 or 1,000 pounds, how do they get that level of business so that they are earning all the time?

 

Now honestly, the key to success and what makes it very, very easy to get to this level is when you start adding recurring income in. Because you have to look at what your costs are for the business, and you have to then work out what you need to earn. Now this is not just about charging any price and thinking, “Right. Well, this is what I’m worth. This is what I’m going to tell.” If you’ve got value and a benefit and you are making real transformations, be it with products or services, however you are working as a business, then you have the ability to command what money you want. But it has to be ethical, it has to be authentic.

 

Now I did not start at the age of 21 with the day rate that I’ve got now, because that comes with experience, expertise. But, biggest thing, transformation and results, that I know as time that I’ve grown, that my confidence, my ability, all of that has got me to a point and a positioning with what I have done to be able to charge those figures. Now if you are starting out, you can’t just go in at really high prices because you’re going to struggle to get customers and so on. There’s a fine balance that you can build up.

 

The key is here is that if you are breaking it down to 52 pounds an hour, that doesn’t sound too bad. Think about, number one, plotting out your calendar. Now you could do this just on a sheet of paper. You could do it on Google or whatever. But as long as we’re looking at the month you’re probably looking around about 20 days, that you will be able to work within the business. Now that’s assuming that you’re doing a five-day week. Now most business owners starting out are doing that. And then as you progress and grow or if you have obviously children and things like that, you might have to ebb and flow. You might be working between three and five days.

 

Knowing your numbers is a gamechanger

 

Whatever your balance is, this is about you. You have to work out how many days you’re working a week, how many hours in a day, and what days you have to be delivering, so that you can understand your charges and how you get to this point. Knowing your numbers, honestly, at this point is a game-changer. Because if you have this on a spreadsheet right next to what your costs are, you become really visual and connected. Because every time you spend money, you start to understand how long it takes you to earn that.

 

Let’s say you are looking to invest in ads, et cetera. You have to understand what money you’re looking to get back. It’s the same when you are positioning yourself or selling your time, you have to look at, “Well, what money am I going to get back for the time and the effort I put in?” And this is a case of you have to factor in travel, any venues, any delivery costs of whatever service you have. Now become really clear on your actual cost of sales. Now this is the money that is directly impacting when you fulfill that client’s order. Now that client’s order with you could be a VIP day, it could be a consultancy day. It could be you’ve got a marketing business where you’ve got an agency day. Or you are doing training, or you have a particular product or a piece of software.

 

Whatever that is, you have to really understand three things. Number one, what you have to earn each day and what costs are incurred for that day for delivery and running the business. Now once you understand that, your pricing model comes into play and it’s very difficult not to then start making profit, because you’ve got full clarity of what you are spending. It also means that you’re not tempted to overspend. When you’re not generating the right income it’s really tempting to go out and do more and start investing and thinking, “Right, pushing through. This is the right way to do it.” If it’s in maybe working with a coach or a mentor that you know that that’s going to move the needle in your business and you can feel that there’s going to be a definite shift, an outcome, then fair enough.

 

Think about saving and selling every day

 

But be very choosy, be very selective of what you are spending. Because what I teach every client that I work with, regardless, what stage they are, is to think about saving and selling every day. These are the two things that actually do move the needle in your business. Because if you can cut things down, and just last week, this is crazy, for me, who is so into save and sell, we have Linda in our accounts team who manages all our subscriptions. She goes through everything. And I feel really in control there.

 

One thing that I had was my mobile phone. I only found out that I’ve been paying since 2020 for a mobile phone line attached to an iPad that I could have canceled. I mean, and that’s 35 pounds a month. I mean, I’ve paying that for two years. Then I find out that I’ve got five additional charges, add-ons, on my mobile phone account because I’ve never even looked at the bill. That was a big mistake. These five charges were 20 pounds a month. So I’m costing myself 600 pounds extra a year.

 

This is why save and sell is a really good process. Knowing your numbers and understanding what a six-figure income looks like and really drilling it down to the point of obviously daily rates, it means that you’re always going to price yourself according to your outgoings, and according to the things that are going to change and move your business forward. It doesn’t look that overwhelming when you see how much you actually need to make an hour.

 

How you could hit £8,000 a month

 

What you need to do is figure out now where you need to bridge that gap. Do an activity, start reviewing your pricing, start reviewing your outgoings. Start really breaking down, whatever product or service you are delivering, what is the cost of sales? And remember those three magic numbers are going to set you apart. Hopefully at this point now you will know what you need to earn per hour or to set a daily rate. And then you can start to push forward and look at the mix of products and services you need to sell to get to that magic number.

 

Now let’s say you’re trying to hit 8,000 pounds a month. You might have to put a combination of three different things in that you can actually deliver. Maybe it’s that you are doing one day consultancy a week, and that’s bringing you in 4,000 pounds. And then you have an online course that you sell for 1,000 pounds and you sell two of those in a month, so that’s taking you to six. And then maybe you have a membership that you’ve managed to build up, and that’s bringing you in an extra 1,000. And let’s for argument say that you’ve gotten 1,000 pounds deficit, how would you fill that?

 

You need to charge your worth

 

First thing to do is look for the easiest way, the best route, the one that you can fit in, that’s going to be the quickest fix. Now if that is doing in your mind one-to-one, then really think carefully about it because what are the delivery costs and time associated with it? Possibly the best option might be to go for the semi-passive like the instant online course that is 1,000 pounds. So don’t always be tempted to go for your high ticket, go for the item to add revenue that doesn’t necessarily require all of your time.

 

What we’re trying to do here is look at what activities can happen in your business that can earn you money without you having to be directly involved all of the time. There is a level of passive income or semi-passive income that can arrive if you put the effort into maybe creating an online course.

 

Hopefully that was useful. Hopefully it took some of the dauntingness associated with all of this terminology when we see and hear six-figure income. But rest assured, the most important thing that I want you to take away from this is that you need to charge your worth. And you need to think that if you feel, by listening to this, at all that, “I need to change my pricing,” go and do it now, because this will be a game-changer. And you can see what a difference of 52 pounds an hour is and what that can do. If you got that magic number of 8,000 pounds a month, that’s an extra 100,000. It could be your first 100,000 for the year, but it’s totally achievable. And there’s many businesses out there, honestly, that I have seen from startup right the way through.

 

So if you are at the start of your journey, good luck and mapping your way to a 100K. And if you’re looking to add your next 100K, then again, a massive, massive luck and joy to you too. Profit is the sanity, and revenue is vanity. So whatever you are doing, whatever money you are making, make sure you pay yourself and that you are looking at those three numbers all the time to maximize the profit that is in your business to build a life of joy, freedom, and wealth.

 

Join me on the next episode. And again, come and find me on social media, let’s connect, and let’s find out how you are doing in your business.

 

Thank you for listening to Dawn of a New Era Podcast. And for your free checklist to find out how to boost your business for growth, profit, and success and join our community, go to dawnmcgruer.com.