Whilst I cast no doubts on their business acumen, I do wish to draw your attention to the fact that most of these statements and adverts are from Americans. There are even a few with English chaps out there doing lovely voice overs while they indulge in their “lifestyle business” and “6 figure income“.
Income is not profit
Why is this an issue? Well 6 figures refers to an income of $100,000 or more. A nice number but even with the rubbish exchange rates after the Brexit shenanigans that equates to around Â£76,000 ish.
While Â£76,000 is nothing to be sneered at, this is income. Income, as in the revenue it makes, the turnover it takes. There is never any mention of the normal day to day running costs suppliers or the money that would go to the tax man that reduce the profit quite drastically.Â Do not get income confused with profit!
There are all manner of businesses that have massive turnovers or income but they actually make little or no profit. This would be because the margin is very low and the running costs very high.
Before you hand over your hard earned cash on these course, webinars, seminars or other products ask the question, what is the profit?
How can i check their claims?
Something that is concerning is there is no way to validate these American company’s claims. There is not single place where the accounts have to be submitted unlike our Companies House. There is no legal requirement in the USÂ to make limited companies or LLP (as is the America equivalent) to allow their finances to be open for inspection.
For me when i see one these claims on Facebook or an advert etc then first thing I do is check if it’s UK based. Why? Because I can check the balance sheet of course.
With a bit of simple digging around you can find out if the organisation behind the claims is worth the hype. Look at the footer or about us page on their website, if it is a limited company it should have a company registration number. Once you have this go over to CompanyCheckÂ and punch in this number.
If you can find a company number do some digging about the person promoting the product, these people like to self brand so check them out and then go back to CompanyCheck and put their name in. You find what companies they currently are involved in andÂ previous ones.
You can see the freely available information about this company or person.Â You will immediately see a snapshot of their business finances to get a gauge of how the company is doing.
Would you trust a company that says it can make you thousands with its clever formulas for blah blah blah, when their accounts show little in the way of covering there own costs? Or after saying they have years of experience when the incorporation date is less than a year?
I am not saying that this information should be taken as gospel. After all, building an organisaton takes time, all small businesses have to start somewhere. I am just saying be wary of the claims if the figures don’t quite match up.
So, in conclusion…dont believe the 6 figure income myth! It is out there, and is achievable but its not as easy as its made out.