Annualize your current business performance instantly.
Last 1 Month (Monthly)
Last 3 Months (Quarterly)
Last 6 Months (Half-Year)
Full Year (Actual)
Calculation Results
Based on your input, your estimated Annual Revenue Run Rate is:
$0.00
Understanding Revenue Run Rate
The Revenue Run Rate is a financial forecasting method that takes current revenue data from a short period (like a month or a quarter) and extends it to predict total revenue for a full year. It operates on the assumption that current performance will remain consistent over the next 12 months.
The Formula
To calculate the run rate, you divide the revenue from a specific period by the number of months in that period, then multiply by 12.
Annual Run Rate = (Revenue / Months in Period) × 12
Why Startups Use Run Rate
Run rate is a vital metric for early-stage startups and SaaS (Software as a Service) companies for several reasons:
Benchmarking Growth: It helps founders see the impact of new customer acquisitions immediately without waiting for a full fiscal year.
Fundraising: Investors often look at the "Annual Recurring Revenue (ARR) Run Rate" to value a company during seed or Series A rounds.
Budget Planning: It provides a baseline for how much a company can afford to spend on operations and marketing based on current income levels.
Realistic Example
Imagine a mobile app developer generated $15,000 in revenue during the month of March. To find the run rate:
Metric
Value
Monthly Revenue
$15,000
Calculation
$15,000 × 12
Annual Run Rate
$180,000
Potential Pitfalls
While useful, the run rate can be misleading in certain scenarios:
Seasonality: A retail business might have a massive run rate in December, but this doesn't reflect the slower summer months.
One-time Gains: Large, non-recurring contracts can artificially inflate the run rate.
Churn: If a SaaS company has a high cancellation rate, the run rate may overstate future income.
function calculateRunRate() {
var revenue = document.getElementById('periodRevenue').value;
var months = document.getElementById('periodType').value;
var resultDiv = document.getElementById('rrResult');
var displayValue = document.getElementById('finalRunRate');
var avgText = document.getElementById('monthlyAvgText');
if (revenue === "" || parseFloat(revenue) <= 0) {
alert("Please enter a valid revenue amount greater than zero.");
return;
}
var revFloat = parseFloat(revenue);
var monthsInt = parseInt(months);
// Calculation Logic: (Revenue / Period Months) * 12
var monthlyAverage = revFloat / monthsInt;
var annualRunRate = monthlyAverage * 12;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
displayValue.innerHTML = formatter.format(annualRunRate);
avgText.innerHTML = "This assumes a steady monthly average of " + formatter.format(monthlyAverage);
resultDiv.style.display = "block";
// Smooth scroll to result
resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}