For years, the million-dollar business has been held up as one of the ultimate entrepreneurial milestones. And for Black women, reaching that milestone can carry particular significance. Black women-owned businesses have grown substantially in recent years, with the number of Black women-owned employer businesses increasing 51.2% between 2019 and 2024, according to the 2025 Impact of Women-Owned Businesses report commissioned by Wells Fargo. The average Black woman-owned business, however, generates approximately $24,000 in annual revenue.

The Million-Dollar Business Trap

This financial reality doesn’t always make it into the social celebration posts: A company can bring in $1 million or more while its owner struggles to pay herself consistently, has little personal savings, carries significant debt, or isn’t building meaningful wealth outside the company. “The business may look successful from the outside, but that success isn’t necessarily translated into financial security for the person who owns it,” says Octavia Conner, CFO, tax strategist and founder of Say Yes to Profits.

She calls this the “Million-Dollar Business Trap”: a company can appear financially successful while that success isn’t showing up in the owner’s personal finances. This can happen when substantial expenses for payroll, contractors, overhead, debt payments, and taxes account for most of a company’s revenue. “Even a profitable business may have cash tied up in unpaid invoices or already committed to expenses coming due,” says Conner.

That’s an important distinction because revenue, profit, cash flow, and personal wealth tell us different things about a business owner’s financial life and the state of the business—yet the terms are often used interchangeably. When that happens, business owners can have a distorted picture of how financially healthy their company actually is and how much wealth they’re personally building.

“Revenue is what the business earns. Profit is what remains after expenses. Cash flow tells you when money actually comes in and goes out,” adds Conner. “Personal wealth, on the other hand, is what you build and own beyond the business.”

​How a Million-Dollar Business Can Still Leave You Broke

For Black women entrepreneurs, who often enter business ownership hoping to gain greater autonomy and create wealth on their own terms, that promise isn’t fulfilled simply because the business grows. How the company handles payroll and pricing matters, too.

“Many women business owners put their own pay at the bottom of the list, even when their companies are generating significant revenue,” Conner says. “Then they look at what’s left and determine whether there is enough money for themselves.”

There can be several reasons for this: An owner may worry that the business will need the money later, she may feel responsible for everyone else before herself, or she may never have established a formal approach to owner compensation and instead make the decision based on whatever happens to be in the bank account that month.

That’s why Conner recommends including owner compensation in the financial plan rather than treating it as an afterthought. “If their team’s pay belongs in the budget, their owner’s pay should be there as well,” she says.

Find Your Happy Price

Pricing can also complicate the problem. “A business can be busy, booked and bringing in plenty of money while still charging too little for the work required to deliver its products or services,” says Conner.

One useful way to address underpricing comes from Michael Ellsberg, business writer and author of The Education of Millionaires, who introduced the idea of a “happy price” and “sad price.” The premise is simple and somatic: Imagine someone offered you a particular amount to do a specific piece of work. Does your body say, “Yes, I’d be happy to do that?” Or does it immediately say, “Eww, not for that amount?” The latter is your sad price. Your happy price is the minimum amount at which you feel genuinely good about doing the work. This framework works best when it lives inside one of the four common pricing models.

Four Ways to Price for a Business That Can Build Wealth

They include cost-plus, value-based, competitive, and dynamic pricing—which give business owners different ways to think about the number they put in front of a customer.  For Black women entrepreneurs trying to build wealth, a pricing strategy needs to leave enough room for the company to pay the owner, cover its obligations, generate profit, and ultimately help the owner build assets outside the company. 

Cost-plus pricing starts with what it costs you to deliver the product or service and adds a desired margin. For a product-based business, that might mean accounting for materials, production, and fulfillment before adding a markup. For a service business, the calculation can include labor, contractors, software, overhead, and other delivery costs.

Value-based pricing starts somewhere else: What is the result worth to the customer? A consultant who helps a company solve a costly problem, a designer who creates a brand that allows a business to move into a higher-priced market, or a specialist whose expertise saves a client significant time may be delivering considerably more value than the hours required to do the work would suggest.

Competitive pricing looks at what comparable businesses are charging. Knowing the market matters, but copying a competitor’s price without knowing whether their cost structure, experience, capacity, or profit goals look anything like yours can create problems.

Finally, there’s dynamic pricing, in which prices change based on factors such as demand, timing, availability, or market conditions. Airlines and hotels are familiar examples, but the principle can apply to smaller businesses, too.

​Business Advice to Reconsider on the Journey to Personal Wealth

Building wealth through your business doesn’t mean following every piece of conventional business advice. Sometimes, it means asking whether that advice is actually helping you build personal wealth. Start with these mindset shifts:

Reinvest—but not everything. Reinvesting can help a business grow. Hiring, marketing, technology, and new products can all be worthwhile uses of business revenue. But reinvesting shouldn’t become automatic. Before putting the next dollar back into the company, ask: What is this money expected to produce?

If the answer is more revenue, greater efficiency, increased capacity, or another measurable benefit, it may be a smart investment. If there isn’t a clear return, the money may have a better job elsewhere—including paying you.

Let your business build wealth for you. Your business can be a wealth-building vehicle without becoming the place where all of your wealth lives. Once the company can cover its obligations and consistently pay you, consider moving some of that value into your personal financial life through compensation, retirement savings, investments, or other assets.

Keep a cash cushion—but make your cash work. Setting aside several months of business expenses can give you breathing room when revenue fluctuates or an unexpected expense hits. But where you keep that money is important, too. If you’re maintaining a six-month operating reserve, consider keeping it in a competitive high-yield business savings account or another appropriately liquid vehicle rather than letting it sit indefinitely in a low- or no-interest account.

Remember growth and scale aren’t the same thing. More revenue doesn’t automatically mean a healthier or wealthier business. Growth often requires more people, more expenses, more working capital, and, sometimes, more of the owner’s time. Scaling means increasing revenue or output without increasing costs at the same rate.

Sometimes the path to personal wealth isn’t another million dollars in revenue. It may be better margins, stronger systems, higher owner compensation, and more money leaving the business and becoming part of your personal balance sheet.

You’re not a sellout if you…well, sell. Black entrepreneurs sometimes worry that selling a business may signal to their community a lack of commitment to the mission or that they didn’t build something meant to last. But selling can be a legitimate wealth-building strategy—and for some owners, it may be the moment when years of work in the business becomes personal wealth outside of it.

Numbers May Not Lie, But They Don’t Always Tell the Whole Truth

For many Black women entrepreneurs, the business is their largest asset. The problem comes when it is also their only meaningful asset. If the business has a difficult year, the owner’s household can suddenly face the same financial risk as the company.

Building wealth outside the business starts with making sure the company can support you consistently. That starts with understanding what you need to live on and what the business can reliably afford to pay you. If those numbers don’t match, the gap needs a plan because the ultimate goal is this: The business should help you build financial security beyond the business itself—not the other way around.

Kara Stevens, EdM, is the founder of The Frugal Feminista and author of heal your relationship with money and Unmasking the Strong Black Woman. Connect with her on LinkedIn.

Read the original article on Essence.