Frequently asked questions
What is a revenue forecast?
It is an estimate of the income your business will earn in future months, based on today's revenue and an expected growth rate.
How does this calculator work for revenue forecast?
It compounds your monthly growth rate. With 5,000 of monthly revenue and 5% growth for 12 months, revenue in month 12 is about 8,979 and the total of the 12 months is about 83,565.
What does "Revenue in final month" mean?
It is the revenue in the last month of your forecast: current revenue × (1 + growth)^months.
What does "Total over the period" include?
The revenue of every month in the forecast, starting with the first month after your current month.
How do I choose a growth rate?
Use the average monthly growth from your recent history and stay cautious. If you have no history, test a few small rates rather than relying on a guess.
Is steady growth realistic?
Rarely. Seasonality, lost customers and market limits all change growth, so treat the result as a planning estimate, not a promise.
Should I run several scenarios?
Yes. Run a low, a base and a high growth rate to see the range of outcomes and plan for the lower case.
Does it include seasonality?
No. For seasonal businesses, forecast each season separately or adjust the monthly results by hand.
Is a revenue forecast the same as a profit forecast?
No. It covers income only. Subtract your expected costs to estimate profit.
How is revenue different from cash flow?
Customers may pay weeks after you invoice them, so cash arrives later than revenue. Plan cash separately from revenue.
Should I include one-off sales?
Base the compounding on regular or recurring revenue and leave out one-off sales that will not repeat.
Can I use negative growth for revenue forecast?
Yes. Enter a negative percentage to model a decline.
How do I convert yearly growth to monthly growth?
Monthly growth = (1 + yearly growth)^(1/12) − 1. For example, 60% a year is about 4% a month.
How can I use the forecast for budgeting?
Base costs and hiring on the base case, and set triggers, such as hiring when revenue reaches a target level.
How often should I update the forecast?
Every month, replacing the estimate with your actual results.