Many people dream about making 6 figures (or even 7 figures). Most entrepreneurs start businesses with the goal of making ‘good’ money. The shocking truth, however, is that most small business owners don’t actually make a 6 figure income. According to a study by Fundera, “86.3% of small business owners said they take a yearly salary of less than $100k.”
Is it really that hard to make $100K a year? While it does take a lot of work, it is very possible! It’s also true that most businesses fail in the first five years. But you CAN beat the odds! You just need a plan, a good plan, for reaching this goal. While everyone’s journey will be different, the 6 steps to making 6 figures in this article will give you a great start! Remember what Ben Franklin said… “if you fail to plan, you are planning to fail.”
Crafting your Hundred Grand Plan starts by asking yourself one question:
What must be true for you to be a 6 figure earner?
This question might seem simple, and it is. Making money isn’t rocket science (unless you’re Elon Musk). You simply need to figure out the right formula for reaching your desired level of income.
6 Steps To Making 6 Figures
The following steps are the building blocks for understanding what you must do to increase your income. If these things are true for you (i.e. being implemented in your life), you are well on your way to making 6 figures… or more!
1. Commit to making it happen
You must be committed to more than hard work. That’s a given. You must also be committed to overcoming the ideas and mindsets that have held you back. This is probably the hardest commitment of all.
The truth is, you must be committed to believing that making this amount of money is possible and virtuous. If down deep you really don’t believe it is possible… you have lost the battle already and it will never happen for you. Don’t offer excuses for why it won’t happen. Instead, make up your mind that it WILL happen!
Repeat after me, ‘making a good living is a good thing!’ If you provide value to others in the marketplace you deserve compensation. Not only that but if you are following God’s Plan For Money, you will be a wise steward and use your income to bless others and the kingdom of God. The more blessed you are, the bigger the financial blessing you can be to others!
2. Plan your path forward
Is your current job, career, or business reasonably capable of providing a 6 figure income in the near future? If not, it may be time to look for a different path.
Many people either get comfortable where they are or are afraid of making the leap to something else. While it is true that you can’t get very far if you hop from job to job or business idea to business idea. But would you stay on a train if it’s headed the wrong direction and will never take you where you want to go?
You must create a reasonable plan for increasing your income. Think through what it would take to increase your income to your target range. It may mean expanding your territory, increasing sales, firing unproductive employees and hiring better ones, raising prices, etc. Sometimes it helps to use the phrase ‘what if’ to figure out what needs to happen. For example, ‘what if I increased my hourly rate from $45 to $75’ and then figure out what it would take to make that possible.
If you work for someone else it may mean that it’s time to look for a new position or crank up that side hustle you’ve had simmering on the back burner. Regardless, you need to find out what needs to happen to increase your income and then create a plan to make it happen. Remember, an actionable plan put on paper is far more likely to happen so get with it!
3. Increase your value
In order to make more, you must be worth more. In the example above, if you increased your rate from $45 per hour to $75 per hour but you are really only delivering $45 to $55 an hour worth of value, you have a problem. On the other hand, if you increase your productivity, bring more experience and/or expertise to the table, etc. then you can justify raising your rates. The key is being able and comfortable with demonstrating your value.
Many people are terrified about demonstrating their value. If they get push back on price they immediately give a discount or they may undercharge at the onset to avoid potential push back in the first place. You MUST become comfortable with demonstrating the value of the solution you provide. Practice on yourself first by writing down on paper why your product or service is worth what you charge.
Here are a few areas you can work on increasing your perceived value:
- Education (formal and informal) | You bring extra insight to the table
- Start reading books, take a class, get industry certifications, or begin your MBA. Anything you do to continue your education will increase your value in the marketplace.
- Experience | You know what you’re doing
- This one takes time… but it also takes initiative. Experience isn’t just the number of years you have been doing the same job. You can also increase your experience level by taking on challenging projects or doing things outside your field and bring those experiences back to differentiate yourself from your competitors.
- Efficiency | You can do it faster and/or easier
- If you are a bookkeeper, can you create workflows that help you enter transactions 50% faster than the average bookkeeper? If so, your value is 50% higher than that of the average bookkeeper and you can charge accordingly.
- Effectiveness | You solve your customer’s problem better
- Find ways to solve your clients’ problems better than the competition.
- For example, if you are in the pest control business can you increase the effectiveness of your treatment? If so, you can probably command a higher price.
- Scale | You serve more people/businesses
- If you offer coaching services, consider doing a class of 20 people instead of just one-to-one. If you sell products, look for more stores to carry your product. Any time you increase the number of people you serve the greater your compensation will be.
- Connections | You know people and can bring them together to achieve each others’ goals
- Start networking with others in your field
- Intentionally look for ways to help others connect so they can get what they need
You can start working on increasing your value in any or all of these areas almost immediately. Don’t wait. Get going!
4. Build your circle
Building your circle of influence is probably the number one thing that will help push you towards greater financial success. The blunt reality is, you become who you hang around with. That’s not to say that you have to cut everyone who makes less than 6 figures out of your life. Far from it!
The key here is to intentionally build relationships with people that either have the level of success you want (mentors) or at least share the same goals and mindsets you are trying to implement in your life. Those are the people you want influencing your decisions and challenging you to grow. If the voices you listen to are people that complain about how hard it is to get ahead in life, it’s like toting around 50-pound weights in your success-oriented mind and will slow down (if not eliminate) your progress.
This means you may have to step outside of your comfort zone. Start backing away from negative voices and look for positive voices that encourage you. When you first start networking with high achievers, you may feel like you don’t quite fit in. That’s ok! You are on the journey even if you haven’t arrived yet. Interestingly, as you do this, bigger opportunities will start to ‘find you’ that you never knew even existed. So get out there and get to networking!
5. Focus on incremental increases
The way you eat a big fat Elephant is one tiny bite at a time. If you don’t break down your goal into bite-size peices you will feel overwhelmed and likely give up. Don’t do that!
Instead, set micro income increase goals and start tracking your progress. It may only be a $50 increase the first month. But as you start getting traction you will get more and more motivated.
This breeds a positive cycle that encourages you to keep increasing your value, breaking out of your comfort zone and doing the work to make it happen. And little by little… it will happen and one day you will wake up and realize that you have made it!
6. Keep going!
For most people, making 6 figures and running a successful business isn’t an overnight ride on the express train. You have to stick with it to see your dream become reality. What separates those ‘that tried’ and those ‘that make it’, is follow-through. You can do this!
If you faithfully follow all six of these steps and dig deep on each one, you will certainly start increasing your income. Will you make $100K the first year… maybe… maybe not. But you will see forward progress and if you keep at it there is no reason why you can’t do it and even exceed it! Also, once you apply all these steps and start making a hundred grand, don’t stop at 6 figures! Keep doing what you have been doing and see your income continue to grow!
Thank you for taking the time to read this article! If you have found this helpful please share this with a friend and let us know what stood out to you in the comment section below. If you would like some book ideas to ramp up your self-education journey, check out our business resources page here.