Eric DeeranOne mission — help agency owners build businesses they actually love running.

$200K/Mo and Losing Money Up Front

3 Oct 2026 · 1 min

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In this segment, Eric Deeran breaks down the financial dynamics of a business that appears to generate $180K–$200K in monthly revenue despite a front‑end loss. He explains that the company’s advertising return on ad spend (ROAS) is only 0.88×, meaning they lose money on acquisition. The profitability comes from backend revenue: each client stays for about six months, contributing roughly $30,000 in contract value, which translates to an overall contract ROAS of about 6.6:1. However, this revenue is realized over a six‑month payback period, so the business operates at a loss in the first month and recovers later.

Chapters

So when I plug all this in, they're losing money on the front end. So they're at about a 0.88x ROAS. So not even breaking even. Now the trick is, is the reason they're able to do like $180,000 to $200,000 a month is because they, they're making money on the back end and they have clients continue to stick with them for about $30,000. So they're making money on their contract value. So if you look at their contract value, they're at about a 6.6 to 1 ROAS. The problem is, is they have to wait 6 months to get this. Like they're not getting this in month 1, they're losing money month 1, and then they're slowly making that money back on the back end.