Gerard’s post on the AdSense dip reminded me of a topic I like to raise from time to time.
Are you guilty of positive self-deception when it comes to revenue projections? I know that I am. It’s easy to look at your best month and project that month over the entire year.
To avoid self-deception, and get a more accurate revenue projection, ask yourself these questions:
1. Have I taken into account the significant, proven, annual dips that occur (summer, Christmas through New Year’s, spring break, July 4th, Memorial Day Weekend, Labor Day Weekend)?
2. Am I being serious with myself about expenses? Or am I ignoring some expenses that help me achieve these revenue levels?
3. Is the source of these revenues stable and repeatable? Or are you the beneficiary of some short term lady luck?
…and I’ll leave it to the comments section to add to this list. So what do YOU do to keep yourself honest about revenue projections?
A good article – it is all too easy to fall victim to self deception and self bias.
– Martin Reed
Yeah, except that I have no time to blog on my blogs ;P
What do you do if your site suddenly doubles, triples in revenue and traffic? Chalk it off to lady luck or find out the key factors that caused it and then make them permanent / duplicate them?
The same goes for the reverse.
Raj – good to know you got that out of your system 😛
I, too, fall into this trap. In fact, I used to be overly obssessed with stats, and I’d track MMAs (Multiple Moving Averages) over 15 day, 30d, 60d, 90d, 120d, and 364d windows, to monitor both short and long-term patterns. But in the end, all I really need to do was blog