Most of The Launch And Revenue Numbers You See Are Bull$#*+

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Let me start off by saying this is going to be one of those posts that some of you might not like.

It’s time to expose some lies (I know, that’s a strong word), uncover some truths, and be honest about one of the biggest scams of the blogging world. If you didn’t already assume from the title, I’m talking about how most of the launch and revenue numbers you see flaunted around the internet are complete bullshit.

You know what I’m talking about. You’ve seen it all over Pinterest, webinars, Google searches, and free ebooks. It’s the “How to Make $100K with a Blog” and the “How I Made $250K on My Course in a Month.” It’s what Regina Anaejionu calls the 6-Figure Blogger Suck-In.

The “6-figure suck-in” really refers to the super annoying trend to publish income reports that are misleading, to title your courses and resources in a way that implies an unrealistic promise, and the wave of people caught feeling like they NEED to make 6-figures or NEED to reach a certain income amount in a certain time or else they’re failures.

It’s a topic rarely breached and honestly unknown to many who encounter it on a daily basis. Even the people who use this tactic don’t always realize they’re sending out misleading information when they’re doing it. So let’s take a few minutes and talk about the reality behind it all.  

Let’s dig a little deeper into those numbers to find out where they’re coming from and why they don’t add up to the hype they cause. Are you ready for the truth?

Why Launch Revenue Numbers are Bull

People front load their numbers. When people talk about their big launch and revenue numbers, it’s easy to forget that they’re most likely not making that kind of money immediately. This is where some funny (funny-odd, not funny ha-ha) accounting takes place.

You have to keep in mind that people are counting their totals without taking the time to subtract some BIG pieces of info. Think refunds, customer drops, expenses and payment plans. By not telling you how much it cost to make that amount of money or even how their customers are paying them can make a big difference on that top line number. So let me first introduce you to the cash-based vs. accrual-based accounting conversation.

If a blogger is cash-based, they record expenses and income when the money exchange takes place. If they’re accrual-based, they make the record when it’s actually earned. Both are valid accounting methods, but the problem is people want to use both at the same time.

For example, in the month of June, if a blogger counts the $2K they made from paid-in-full sales of a course (cash-based) as well as the “promise” of the $3K they’ll make from payment plans over the next 6 months (accrual-based), they are cookin’ the books. The actual amount they made in June was $2K, but some bloggers will say its $5K.

Tricky, right? When this happens, those people are trusting their customers to pay, but you just never know.

Speaking of payment plans…Instead of reporting the prorated amount from payments plans, many bloggers will report the total amount, even though they won’t hit that number until the end of the installments.

Take ConvertKit as an example. If we said we made $300 off a customer who started a $29 a month payment the day they signed up, we’d be totally lying. Not only did we get just that $29, there’s no guarantee this customer will stay with us for the full year or keep making those payments.

This same issue pops up when bloggers count payment plans as recurring revenue. Sure you’re making $10K a month in recurring revenue with payment plans, but that only counts until those plans expire. You just can’t count on that money being stable year after year. The churn is inevitable.

However, there are some bloggers who choose to stay away from payment plans. Some because they’ve heard too many horror stories about how failures and chargebacks. Some like, Sean McCabe, don’t do payment plans to keep their audience financially secure.

Why don’t I offer payment plans then? Because I don’t want people to live outside their means. I certainly don’t want them to go into debt. If someone cannot yet afford a product from me or they would have to go into debt to buy it, I don’t want their money. I want them out of debt.

How nice.

Finally, people don’t talk about their expenses. The more money you make, the more money you spend. So often, you’ll see someone talking about their revenue numbers jumping from $100K to $250K to $500K, but what they aren’t saying is that their profit margins are dropping from $90K to $60K to $30K. You have to think about their overhead, their employees, and all those other things that keep their business running that add up and take away from the overall top line number.

Again, I’ll use ConvertKit as an example. To go from making a $98K to over $300K required a fundamentally different style of business. Nathan HAD to hire a team at that point. Paying those salaries made our top line take a hit but was necessary to keep us running and growing. So while we were making about $180K in MMR in March, our profit was really $50K.

 

 

ConvertKit Revenue vs. Expenses
On this chart you can see revenue (blue) compared to rough expenses (green) each month.

 

All this to say, the more we can focus on the actual profit and take home, the more realistic those numbers become.

How to know the truth about revenue numbers

From what you just read, you might assume that I’m totally against people sharing their launch revenue numbers.

Wrong!

Even though those numbers may be bloated and there will always be flaws in how people add them up, they are still doing a service to the community. Sharing your numbers is a great way to stay transparent and get people excited about what you’ve got going on.

So keep sharing, BUT here’s a couple things to be weary of when you’re reading these kinds of posts and then some things to make sure you do if you’re writing these posts.

What to watch out for when reading launch revenue posts

Expenses. What did this blogger spend in order to make that much money? The cost of designers, hosting, creating content and tangibles, and the blogger’s time have to be taken into account when adding up the big number.

Up front revenue. Remember those payment plans I talked about? If the blogger has a bunch of customers sign up with payment plans, they still might be touting the total yearly cost instead of the smaller monthly cost. You just can’t say you made $100K this month if only 50 of your customers paid the full $5K cost of the course upfront.

Non-launch revenue. Is there already a set baseline revenue so that every month is profitable? And what kind of budgeting system do they put in place? That means, if they made $40K in one month, do they have other streams of revenue to support them the other 11 months of the year or do they have to divide that $40K into $3K a month to live?

Taxes. It almost feels like I shouldn’t even have to mention them. Taxes are inevitable, but somehow when we see someone making a big number, we still automatically assume, “Wow, you’ve got a lot of money to spend!” But the reality is no matter how you make money, even online, you still have to pay your taxes. So when you see “I made $100K in one launch,” know that they probably aren’t telling you that $40K of that is going straight to the government.

What you should cover when writing a launch post

How much work truly went into your launch. No pain, no gain. I’m sure you sacrificed a couple things to get your launch out. It may have taken months to get there, but you did it and it was hard work, right? Don’t brush over that fact. Be honest. People these days are too into instant gratification and it’s just not a reality in business.

Give your backstory. Tell your audience what platform you had that enabled you to reach this goal. So often we hear stories about “How I made $12K in 5 minutes.” Those stories can be totally true, but we’re not told about the 3 years of email list building that got them to that point of leverage.

Share your expenses. I think you know where I’m going with this one. If you make $150K on your launch, let the people know it cost you $10K in design, $15K to pay your team, $15K in product creation and then about $45K in taxes, leaving you with $65k in take-home.

PS- Big numbers in launches don’t matter anyway. Be proud that you made something that people think is valuable. Even if you make $2K—Celebrate!

Budgeting for the rest of the year. Just because you made a lot of money in one month doesn’t mean you can rest on your laurels for the rest of the year. You’ve got to put that money to good use and one way is through your budget. Let your readers know how you plan to put that money to work.

So there’s the truth about revenue numbers.

I didn’t write this post to scare you into never sharing your numbers. I wrote this post so you would know how to translate those fanciful figures into reality. I wrote this post to tell you an accurate story of launches and big revenue numbers. Let’s be real and honest, guys.

When it comes to running your business, transparency is key. You might not realize it, but a lot of people will look to you because of your success. So set a good example. Don’t fool your audience into thinking your success was easy. You know it was hard work. You know it wasn’t all candy and 6-figure launches.

So don’t mislead your audience. If you’re sharing or teaching about your revenue, make sure you’re telling the whole story. But mostly, just work hard and be proud of what you’ve done. Like my girl Val says, “Invest in your work more than you invest in reading about other people’s successes.”

Dani Stewart

As a daughter of an entrepreneur, the wife of an entrepreneur, and an entrepreneur herself, Dani has lived and learned all sides of creating and growing businesses. She is excited to bring all that life experience as well as a decade of crafting content to the ConvertKit community. She is a part-time baker, dinner-party planner, and lover of good bourbon living the simple life in Nashville with her husband, Sean.

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