Revenue Forecast Calculator

Even good forecasts have ±20-30% error 12 months out, ±50% error 24 months out. Top-down market forecasts are nearly always wrong. Bottom-up (deals × close rate × ASP) tracks better. Update monthly with actuals - don't treat forecasts as commitments.

Budget = annual spending plan, set once. Forecast = updated revenue/expense projection, refreshed monthly or quarterly. Budgets drive constraints; forecasts drive decisions. Best companies do rolling 4-quarter forecasts that update with actuals.

Bottom-up (sum of individual deals/customers/units) is more accurate but time-consuming. Top-down (market size × share) is faster but optimistic. Use bottom-up for next 3-6 months, top-down for 12+ months. Reconcile both - gaps reveal blind spots.

Base the rate on your business's recent history if you have it. If you're new, research benchmarks for your industry and growth stage. To validate the rate, map the funnel: how many leads does that growth require, and does your current conversion rate support it? A forecast without a validated funnel behind it is just an optimistic guess.

Linear growth (adding the same amount every month) doesn't reflect how compounding businesses actually grow. Monthly compounding produces a curve whose monthly rate, raised to 12 months, equals the annual rate exactly. That gives the projection a more realistic shape, especially over long horizons.

It's the revenue level the business would be generating at the end of the projected period if it kept that pace up for 12 months. It's useful for valuations, investor conversations, and setting next year's targets. It reflects current momentum, not the period average.

Year-over-year growth compares the year-2 total (months 13-24) with the year-1 total (months 1-12) of your forecast. If you're showing 8% annual growth, the year-over-year figure should be roughly 8% too, with some variation from seasonality. It's the most intuitive way to communicate growth to partners, investors, or leadership teams.