Revenue run rate
also known as revenue run rate
A projection of annual revenue based on current performance - taking a recent period and extending it across a full year.
For example, if an agency billed $90,000 last month, its annualised run rate is about $1,080,000. It is a quick way to size the business today, though it assumes the current month is representative.
Why it matters to your firm: run rate gives a fast, current-state read on the size of the business - useful for planning and goal-setting. Its weakness is that it assumes today continues unchanged, so it can mislead if the latest period was unusually strong or weak.
Annual run rate = revenue in a period × number of those periods in a year
E.g. monthly revenue × 12 - best used when the period is representative.
Revenue run rate calculator
Plug in your numbers - it updates as you type.
Prefer its own page? Open the revenue run rate calculator
- Annualising an unusually high or low month.
- Treating run-rate as a forecast rather than a snapshot.
- Ignoring seasonality and known churn ahead.