Predict your company's growth potential over a set period with our revenue growth rate calculator.
Our revenue growth rate calculator can give your business an inside look at its expected revenue 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 and growth percentage, and estimates your future growth potential.
Here's how you can use the revenue growth prediction calculator correctly:
Step #1 - Enter a 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. Alternatively, if you’re calculating monthly growth, the “current revenue” value you input should be your 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 calculate 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 sales growth percentage.
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 growth calculator will display your business's growth prediction on an easy-to-read chart, showing how you can expect your business to grow over the requested time frame. This chart can be either 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 growth rate formula 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 $445,000, 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 $800,000 ARR, a value that 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, but breaking down the time periods according to the right time frames (e.g., four weeks within a month, seven days within a week). The results will give a projected revenue forecast that is either static or dynamic based on your chosen option.
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 predictions could affect your business.
We know how important it is to understand where your business stands today and where it's headed in the future. By creating this growth rate 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.
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 data you enter, the calculations are simply a forecast for your business based on these numbers and equations. There are many different variables that could arise that could affect the forecast, like slow business months, unforeseen fixed costs, 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.
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