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.

  • Brendan Hufford

    Really happy that somebody decided to be honest about this. The ‘six figure’ nonsense has to stop, especially because of the expenses. If it’s 6 figures, and half goes to affiliates, and you pay taxes on the other half, and you only do it once per year, that person just made $30k. That’s nothing to sneeze at, but one of the things I love about ConvertKit is that it’s the opposite of that 🙂 Looking forward to switching to you guys soon.

    • Dani Stewart (ConvertKit)

      We will love having you, @thebrendanhufford:disqus! Let us know how we can help when you’re ready.

  • Lilach Bullock

    Love this post Dani 🙂 It’s so frustrating and terribly misleading about six figure launches. How much money did they have to spend on FB ads to grow their list too? And what about affiliate payouts too? I take everything I read online with a pinch of salt…!

    • Dani Stewart (ConvertKit)

      That’s probably the best way to take it, @lilachbullock:disqus 🙂

  • If it sounds too good to be true, it always is 🙂

    • Dani Stewart (ConvertKit)

      Truth, @pmsteil:disqus

  • Aj Mac

    This is good to point out. That’s why I only recognize income as I receive it. Also, if you spent 300 hours on a launch, you’ve got to include that, too! Time = money!

    • Dani Stewart (ConvertKit)

      Exactly right, @disqus_nvPloxGLiy:disqus .

  • Rachel Yates

    When I first read Regina’s post, I breathed a huge sigh of relief. It changed the way I thought about my launches and my business and took a ton of pressure off. Thank you for supporting her stand against the ‘launch spin cycle’ – and for providing such a great product that supports steady, sustained and successful growth. Hallelujah!

    • Dani Stewart (ConvertKit)

      Yes! Taking the pressure off being majorly successful leaves so much more room to grow in the way that works for you. Thanks for loving on ConvertKit @disqus_oGkNuKiR5Z:disqus!

  • I’m so happy you had the courage to write this post. As an author who’s written about cash flow in small business for years, it warms my heart to see others like you do the same.

    One thing you might want to do is check your chart above that shows your revenue vs expenses. The way it’s currently shown, you made $180k in revenue and had $130k in expenses which would mean you had $50k profit, not the $130k profit you stated in your post. 🙂

    Keep up the good work!

    • You’re right, @deniseoberry:disqus! The chart is correct and the text is updated to reflect that.

      • Thanks for correcting the text. $50k is still nothing to sneeze at. Well done! 🙂

  • Jay Nguyen

    Heya Dani – it was interesting that your blog made me feel that I needed to lower my expectations a bit since it seems that lots of the launch (and even ongoing monthly) numbers might be a tad exaggerated. Would be great if some of the blogs would step up and talk about launch monthly launch profits rather than just launch revenue. Great post anyhow and loving the transparency.

  • Laura M. Ramirez

    Finally somebody decided to expose the truth. When I started I became more and more frustrated because I kept hearing all these big figures and financially amazing successful launches and I thought time and time again, why can’t I make this happen? Until I realized that…hello! something has to be off.

  • Thank you for this. 🙂

  • Believe in a Budget

    I love to read income and launch reports because I find them really educational and helpful. Some reports don’t go into as much detail as I would like, but if it’s a blogger or entrepreneur I’ve been following, I’m really happy for their success. I really don’t like the mean mentality of bringing down others that have worked hard to succeed.

    • Dani Stewart (ConvertKit)

      I love reading reports too,@believeinabudget:disqus. I think it’s amazing to find out how someone created a product from nothing and brought it to where it is today. I’m not trying to negate all the hard work they did because it’s always a lot of hard work. I’m just asking for more reality (I know that’s not always possible on the Internet 🙂 ) in the numbers. I want readers to see beyond a big number and know how long it took that blogger to get there – the crazy hours of work that went in behind the scenes and how much they had to spend to get there. I think it helps readers create more realistic goals for themselves and curbs feeling of failure when they can’t reach those big numbers when they’re starting out.

  • As a savvy business owner, I know all these things. I know them deep down. But for whatever reason, shiny objects distract from the things I know. It’s good to have reminders like these!

    • Dani Stewart (ConvertKit)

      Haha, distractions do happen. Keep trusting your gut @KimberlyHerrington:disqus

  • Of course people lie on the internet! And most of them will never get called out on it. I guess that’s why this post exists. But not everyone with 6-figure online businesses are being dishonest. Look at Pat Flynn for example.

    Nonetheless, I find it detrimental for new bloggers to compare themselves to established names.

  • A huge expense is affiliate commissions too…often 50%!

  • I’ve been wondering about this lately.. apparently FB has decided that I really REALLY need some sort of coaching- since that is the goal of the majority of the ads served to me. Curiosity got the better of me, and I clicked on a couple to see what they are even offering. Courses for $297, $197, sometimes even $67? Why, if you are “booking 100K a month” would you spend all this time on energy on these low $$ course offerings?

  • I loved reading this. I recently read another criticism of a well-known business training provider who claims insanely high launch income (when you sell business training, you have to be impressive, right?) It had seemed a bit suspect, but i’d not known the training was a monthly fee-and they were shouting out the potential income, not the actual one. Now the figures don’t seem very impressive at all.

    Love byRegina btw. It’s the best resource, and example, of how consistent quality and work builds a stable business. It’s one of the few that isn’t all about having one ‘signature’ course based on limited experience and advertising the crap out of it!

  • You know what would make a great post? If you were able to interview a few people about their big launches and get that extra info (hours worked, product expense, etc) and share that. Might be interesting to see that a person with a lower launch has more profit, or that a huge launch was able to be done with minimal investment. Easier said than done, I know! 🙂

  • THANK YOU for writing this post!! After working our asses off for the past 10 months and launching 2 online course and offering multiple rounds enrolments, and following ‘launch plans’ from online notables, we’ve done well, but not hit the six figure mark. We have to keep reminding ourselves that we’ve actually 5x our live workshop revenue by delivering online instead which is a massive improvement, even if we haven’t hit six figures yet. We’re always mindful to keep our overheads low, but it’s our time to do all the work that goes into the launches and ongoing community management, that is not reported in our course P&L, that is probably the biggest expense.

    I’m also really curious to know about the rate of revenue attrition each time a course is re-offered, and if that’s common (the first time we offered the course was the most successful so far, with diminishing enrolments for each subsequent offering). We’re looking at adding unique/additional bonuses each time we offer a new round, and continue to work on list building activities (thanks Convert Kit for helping us out with this!) and sharpening our paid advertising. Would love any insider feedback on that too (an idea for another blogpost perhaps? 😉

  • It always bugs me to see some claim of a large 6-figure number when there’s absolutely no explanation behind it to back it up. I’m not longer impressed by the numbers. I’d much rather see a smaller number with a strategic plan behind it.

  • Dave Stuart Jr.

    So much needed. I don’t even read revenue stuff anymore because it’s nauseating to see the obvious clickbait / misleading / Get Rich Quick stuff become so popular. CKit has always been different. Good work.

  • Interesting point of view…so basically this is similar to saying if someone has a salary of $100,000 they should take out their taxes, healthcare and other expenses before telling someone what they really make? Expenses are just a fact of life no matter how much income you have coming in, from the business owner to the worker bees. Anyone who runs a business should be aware of this and know how to calculate gross revenue from their actually take home cut.

  • This is great stuff, thanks for sharing! I really appreciate the courage to bring this to light.

    • Dani Stewart (ConvertKit)

      Thanks, @vernhow:disqus! Glad you enjoyed it!

  • This is such great info! I remember when I was starting out and reading this…100k sounded ah-mazing until I started getting help from freelance designers and sending quarterly tax payments to the government. Ahhh, I wish someone would have share this in the beginning! Great advice 🙂 Keep it up!

  • all kinds of love of this piece. I’m a CPA so whenever I see the blogosphere touting the next 6 figure (or 7 figure) launches, I roll my eyes because I want to know the answer to all of the questions you posed. Cash versus accrual, what were the expenses, and on and one. YES!

  • Courtney Johnston

    THANK YOU DEAR LORD THANK YOU

  • Joshh

    Love the honesty and depth of the article. But as much as I hate to say this …I’m not so much a fan of the language used in the title/article and that I saw as subject line in my email.

    Magnetic headlines are important and I’m a big boy who can handle the language…but as a professional who uses and promotes this product professionally ..it’s something I don’t care to see.

    Thanks for allowing me to share and thanks for the in depth article.

    • I feel the same way! Loved the info, but could do without the language. I write for and promote to a Christian audience who might not appreciate it! I love ConvertKit to death though!!

  • Jennifer Kellogg

    The link to the Sean McCabe’s contact is for members only. 🙁

  • This is a great thought for many reasons…

    Wonder what would happen if people started looking at “Launch impact”, actually thinking about how much their _____ (THING) is actually serving customers.

    And yes, as @thebrendanhufford:disqus said… don’t forget your affiliates count.

    Cheers

    Kyle (Chief Experiment Officer)
    digitalconversionlabs.com

  • Shane Baker

    I love that you’re so transparent with your business. Not only is it honest but it’s good marketing. Because I just became that much more of a fan knowing you do business this way.

  • Lauren Kepler

    I just heard you on the Being Boss podcast…and after reading this, I feel tremendous relief! It feels like sooo much pressure has been lifted off of me! As I was reading…I was like, you know…50K a year would be amazing! I’m okay with not having “25K” months…that’s almost too much for me, but I’ve been feeling a lot of pressure to do so in order to be “successful”. You set me free! Also…can’t wait to switch over to you all, your product excites me!!

  • I’d much rather see a smaller number with a strategic plan behind it.

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