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Revenue Run Rate Calculator

Project your monthly revenue based on customer acquisition velocity, lifetime value, and churn.

Revenue Run Rate Calculator

Expected number of new customers acquired each month

$

Average lifetime gross profit generated per customer

%

Percentage of customers that cancel each month (default: 5%)

Number of months to project (default: 12)

Understanding Revenue Run Rate

Revenue Run Rate is a forward-looking projection of your annual revenue based on your current customer acquisition velocity, customer lifetime value, and churn rate. It helps you forecast future revenue and growth.

Formula:

Monthly Revenue Projection = New Customers per Month × LTGP

(Adjusted for cumulative customer growth and churn over time)

Why this metric matters:

  • Helps forecast future revenue based on current performance
  • Demonstrates the impact of customer acquisition and retention on growth
  • Provides insight into the sustainability of your business model
  • Helps with capacity planning and resource allocation
  • Used by investors to evaluate growth potential

Key factors affecting revenue run rate:

  • Customer Acquisition Rate: The number of new customers you acquire each month
  • Lifetime Value: The total value generated by each customer during their relationship with your business
  • Churn Rate: The percentage of customers who stop using your product or service each month
  • Expansion Revenue: Additional revenue from existing customers (not included in this basic model)

Note: This is a simplified projection model. For a more comprehensive analysis, consider including factors like expansion revenue, seasonality, and cohort-specific behaviors.

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