I’m all about an abundance mindset. I think we, generally, should be more transparent about our goals, and in terms of business, I don’t think we should be afraid of sharing real numbers.
We can’t get what we don’t ask for, and woo or not – I have seen MAGIC happen in my life when I cast my goals and hopes and dreams into the universe and know that what’s meant to be mine, will be mine.
Once we know not just what market value our products and skills have BUT have some precedent to use as leverage, we can be more confident in asking for compensation that DOES align with our work product, and we – especially we women – can be sure that we aren’t undercutting ourselves.
If we believe that a rising tide lifts all ships, we also have to believe that the tide is sometimes fueled by honest talk. If I know that a colleague who shares my level of experience and my skillset is making a higher salary than me, it should empower me to ask for more compensation at my next review, or to ask my boss for a raise.
Take that out of a traditional role and move it into entrepreneurship – if I know that a speaker who has the same reach, engagement, number of followers, overall influence, etc. has been offered an honorarium of $X and I’ve been offered much less…it gives me context and confidence to either ask for more, or to walk away.
I have a LOT to say about entitlement and the messiness of worth versus value. I love the concept of telling people – again, especially women – that they DESERVE more and should raise their rates, stop trading dollars for hours, work less but make more…on and on and on. But the reality that I too often see right now is that service providers, coaches and consultants can be too righteous about it all…like they should ask more just to ask more, without having a hard look at the return on investment that their clients and customers get.
But that’s an entirely different podcast. I share this little snippet only so you have a bit more color and insight into my perspective, as I go into what I think the real dangers and darkness are when we talk openly about money.
I want to ask you a question – the same one I asked recently on my social media platforms. When someone says they are a 7-figure founder, what do you assume about their revenue?
Have they grossed $1M all time? Netted $1M all time? They gross $1M each year? Or they net $1M each year?
I ask this question because labeling ourselves or others as X-figure founders is very common right now. But if we don’t agree or align on what the definition is, how can we make reasonable comparisons to our success versus theirs?
And we don’t agree on the definition. The results of my poll prove it – grossing $1M all time and grossing $1M each year were fairly split in terms of responses, and that can be a MAJOR difference in dollars. $1M a year each year over 10 years is $10M. That’s 10 times the revenue as someone who has made $1M across those 10 years combined.
And now we have to look at gross – what is earned BEFORE expenses, taxes, etc. are taken out – and net, which is the number AFTER paying those expenses.
For those of you who may be really deep into this topic, there’s another term – EBITDA, or the profit before interest, taxes, depreciation and amoritization – and of course, an even more granular look at gross revenue vs. gross profit.
The words DO matter, and not just when you’re raising money, updating shareholders or running your own small business books to see if you can keep things going for another 6 months.
They matter because all of this comes dangerously close to being a vanity exercise, and one that I think can be really harmful, especially for people who struggle with imposter syndrome or self-image.
And by the way…isn’t that all of us? I have worked and currently work with some of those 7-, 8-, and 9-figure business owners – and when I say those terms, I mean what they generate in gross revenue each year – so I can tell you that even the MOST strong, powerful badass founders find some weaknesses or gaps to worry about.
Or look at other founder-CEOs and wish they had what they had.
Am I entitled to know what you, as a business owner, make? Or what rates you charge? Unless I’m a shareholder in your public company, absolutely not. I’m pretty open with my close business friends and colleagues about money matters, but you won’t hear me giving specific details here on the public podcast about my profits, or how much I pay myself, or my margins, etc.
Call me hypocritical, or say I’m not practicing what I preach when it comes to transparency…but I acknowledge that for most of my life, talking about money and specific dollar amounts has felt a little crass. I don’t need the world to know what my bank account looks like, because I don’t need to invite judgements on how I spend my money – either in and on my business or in my personal life.
But…I also try very hard to NOT add to the noise in a non-productive way. Is it fun and sexy to talk with people about helping them set and achieve 5K, 10K, 20K and even 50K-plus months of revenue? Sure! I love goal-setting, and I often ask clients to operate from an abundance mindset rather than a scarcity mindset.
But when I work with clients on these goals – we get SUPER granular and clear. Why do we want $10K months? Is it to meet our annual top-line revenue goals? Is it because we know our margins and expenses, and we’ve already considered what our annual net revenue will be, based on a $10K month? Is that goal considering the market value for the product or service, and also – what joyful, meaningful work looks and feels like?
$10,000 in revenue sounds great – but one client may be able to generate that in 10 hours of work, where another may need 160 working hours to hit that number.
Neither is wrong or right…even though a lot of coaches will push the message that working LESS is always superior – I am not one of those coaches – but understanding what is required to achieve a revenue goal, based on YOUR service and YOUR market value…is so critical.
Speaking for myself, I love money but not for the reasons you might think. I love what it allows me to do – take my family on nice vacations, have disposable income for “nice to have” purchases like manicures and massages and audiobooks and car washes, enroll my kids in sports programs, contribute meaningfully to charitable causes and organizations, etc.
So yes, I love money. But surviving burnout and examining what led me to working so hard for so long over so many hours…that has helped me understand that I love white space and freedom and rest just as much!
My point is…talking about money makes for good, sexy and simple headlines. I do it, too.
It’s much easier for someone to say, for example, “I am a multiple 6-figure founder” than it is to say “I generated multiple 6-figures in top-line revenue last year, but after expenses, my net profits were actually in the low 6-figures and this year, I’m tracking toward about 60% of what I did last year and in the five years before this, I had less than $100,000 in top-line revenue and also, most of my revenue last year came from one big course launch and right now, sales are way down.”
And it’s MUCH sexier to say “I’m a 7-figure founder” than it is to admit that your definition of 7 figures is a sum of all of the gross revenue you’ve made over 10 years.
I do NOT want you walking away thinking that I’m tattling or trying to make these messages out to be nefarious or unethical. Most founders who share these one-sentence statements about revenue are VERY good people who have had a LOT of success, and I am so thrilled that we’re talking about money at all.
But if you ever feel less than or like a failure because Sally Sue is over there talking about “how easy it is to launch a 7-figure business while working 7 hours a week,” please remember that it’s NEVER the whole story. And your success doesn’t have to look like anyone else’s.
Fun fact – many solopreneurs that I know are more profitable than companies or teams that make much higher gross revenue…which means in the end, a solopreneur’s take-home income may actually exceed another CEO’s.
So…take a step back and decide what YOU need in terms of money and profits to feel great about your life. Take big swings. Go after massive goals. Don’t be afraid to ask for more.
But don’t let what others say or do stop you from what you’re meant to do.