Revenue growth calculator
Visualize your company's growth projection over a set period (year over year, month over month, etc.) with our revenue growth rate calculator.
Visualize your company's growth projection over a set period (year over year, month over month, etc.) with our revenue growth rate calculator.
Our revenue growth rate calculator can give your business an inside look at its forecasted growth over the next few days, weeks, months, or years. With the help of simple formula sequences, our growth rate and revenue projection tool assesses your previous financial data, like current revenue increase or decrease, to estimate your future growth potential.
Here's how you can use the revenue growth prediction calculator correctly:
Step #1 - Enter the total revenue amount in the first field.
Step #2 - Enter a period that reflects this revenue amount in the second field. The length of time can reflect either daily, weekly, monthly, or yearly revenue. Please note that you will need to input your yearly revenue if you're trying to calculate YoY (year on year) growth. If you’re calculating week-over-week (WoW) or month-over-month (MoM) growth, the “current revenue” value you input should be your WRR/MRR.
Step #3 - Enter how many days, weeks, months, or years you would like the growth prediction to be calculated.
Step #4 - Determine whether you would like the revenue growth rate predictor to display growth charts based on a static or dynamic growth rate. We recommend experimenting with the dynamic method because as your revenue value increases, the growth percentage can also fluctuate. It may not be realistic for your business to maintain the same growth rate percentage at higher revenue values.
Step #5 - Enter a revenue growth percentage. Multiple values will be required for dynamic growth.
Now that all pertinent information has been entered in the required fields click the "Calculate" button and let our business growth calculator do the work.
The calculator will display your business's growth prediction on an easy-to-read chart. This chart can be downloaded or shared with others via a link.
Revenue financial forecasting for your business is easy to do with the projection calculator. However, the revenue growth rate calculator is simply a predictive tool and cannot consider all the factors that may affect your business growth.
The formula for revenue growth takes your current revenue amount over the specified period and multiplies it by the projected growth rate percentage for every week, month, or year, to determine your revenue projection.
Example of calculation:
Let’s say you have an ARR of $465,000, a current MRR of $50,000, and a monthly growth rate of 5%. This means that your growth for the next month will be $50,000 + 5%*$50,000, totaling a monthly revenue of $52,500. Our calculator will use this new value to determine the revenue growth for month 3, which will be: $55,125.
Please take into account that monthly growth rates and yearly growth rates are completely different values. A monthly growth rate of 5% translates into an annual growth rate of almost 80%. The revenue growth calculator tells us that, with a starting MRR of $50,000 and a 5% growth rate, the business will reach $89,790 MRR in the next 12 months. This means that the company’s yearly revenue will be approximately $795,500 (including the starting month). To verify our calculation, we can swap the annual growth rate calculator and add our $445,000 ARR together with an 80% growth rate for one year. Performing the calculation, we will see that the tool estimates $795,150 ARR, which is extremely close to our initial calculation.
To make sure your estimated growth percentages are correct for the chosen time period, you can use the following formulas:
Annual growth rate = (1 + monthly growth rate) ^ (12) - 1 = (1 + quarterly growth rate) ^ 4 - 1
Monthly growth rate: (1 + annual growth rate) ^ (1/12) - 1 = (1 + quarterly growth rate) ^ (⅓) - 1
The same rules apply for daily and weekly estimations. It simply breaks down the periods according to the correct time frames (e.g., four weeks within a month, seven days within a week). The results will give a projected revenue forecast, either static or dynamic.
A static forecast will assume a constant growth rate with no other factors influencing it. In contrast, the dynamic forecast uses a much more complex calculation method and considers other factors that may affect business growth.
It is always a good idea to run two different calculations, one that uses the static model and the other using the dynamic model, to get a general idea of how both growth and slowdowns could affect your business.
The revenue growth prediction calculator will allow you to budget appropriately and plan for success by hiring new team members or expanding only when needed. On the downside, however, the growth rate calculator only provides an estimation for growth.
No matter how accurate the present data you enter, the calculations are simply a forecast for your business based on fixed values. Many variables could affect the forecast, like slow business months, economic recession, technical issues, or underperforming products. This is why we strongly recommend that you do not solely rely on this calculator when planning for the future.
We know how important it is to understand where your business stands today and where it's headed in the future. By creating this revenue projection calculator, we hope to provide useful future revenue growth forecasts. We created the tool for internal use as well. Our team regularly breaks down revenue data to measure marketing campaign effectiveness, department budgets, and whether we are on the right track to achieve projected growth.
