Revenue Run Rate: A Simple Way to Forecast Growth

I remember the first time I used the concept of "revenue run rate."

It was during a revenue summit with a B2B SaaS company. We were digging into the numbers, trying to get a clearer sense of where the business was headed. That’s when I realized how helpful this simple—and helpful—this tool could be.

By taking a single month’s revenue and projecting it forward, we were able to give the executive team a directional view of the year ahead. But we didn’t stop there.

We looked deeper. We looked at the marketing channels driving new customers, at the churn rate pulling against our growth, and at average revenue per user (ARPU). The run rate helped us spot where growth was happening and where we were leaking revenue. It forced better questions:

• Do we need to acquire more customers from different channels?
• Can we increase ARPU through upsells, new features, or pricing?
• What can we do to reduce churn so that growth sticks?

It wasn’t perfect, but it gave us clarity. And clarity is gold when you're trying to make decisions, plan hires, or report to a board.

Whether you're a SaaS founder, a small business owner, or leading a nonprofit team, understanding revenue run rate can help you look ahead with confidence. But like any forecasting tool, it's not perfect. And that’s okay. Neither are we.

Let’s walk through what it is, why it matters, and how to use it wisely.

What Is Revenue Run Rate?

Think of revenue run rate like this: It’s your pace.

If you earn $50,000 this month in recurring revenue or giving, and nothing changes, you can project $600,000 over the year. That’s your annual run rate.

Here’s the simple math: Monthly Revenue × 12 = Annual Run Rate

This concept is especially helpful for organizations that rely on consistent, recurring income, like SaaS businesses or nonprofits with a base of recurring givers.

Examples:

• A SaaS company earning $50K/month in MRR → Run rate = $600K
• A nonprofit with 500 donors giving $40/month → Run rate = $240K

It’s not magic. It’s just a way to zoom out and ask: If today’s momentum continues, where will we land?

The answer? Sometimes encouraging. Sometimes humbling. Always helpful.

5 Reasons Why You Should Use a Revenue Run Rate

When you’re leading an organization, clarity matters.

Revenue run rate gives you a snapshot of where things might be headed. It’s not a perfect picture, but it’s good enough to start the conversation.

Here’s why it matters:

1. Quick Growth Forecast

You don’t need a complex model to estimate your future revenue. Run rate gives you a rough forecast in seconds.

2. Investor and Donor Conversations

Run rate is simple to explain. Whether you’re pitching to VCs or presenting to a board of directors, it offers a clear, confident starting point.

3. Annual Planning

For nonprofits, it translates monthly giving into yearly potential. That’s incredibly helpful for setting expectations, planning campaigns, and managing budgets.

4. Channel-Level Insight

When you break down revenue by acquisition or marketing channel, run rate can help you spot where growth is coming from. Maybe email is growing steadily but social has stalled. Maybe one campaign is adding 50 new customers a month while another adds five. The run rate reveals more than a total. It reveals patterns.

5. Performance Gaps and Churn Influence

Your run rate isn’t just a passive reflection of what’s happening. It should drive a strategic response. If your forecast is lagging behind targets, it prompts the question: Is churn too high? Do we need more leads? 

To hit your revenue numbers, you’ll likely need to influence churn, not just acquisition. That could mean improving customer support, onboarding, or retention campaigns.

Picture a long, flat road. If you're driving 60 MPH now, there's a good chance you’ll keep that pace for the next few miles. That’s how run rate works.

But what if the road curves, climbs, or hits traffic? Let’s talk about that.

Picture a long, flat road. If you're driving 60 MPH now, there's a good chance you’ll keep that pace for the next few miles.

That’s how run rate works.

But what if the road curves, climbs, or hits traffic? Let’s talk about that.

How to Use It (And Improve It)

Run rate starts simple. But the way you use it should be anything but surface-level.

It’s one thing to multiply your monthly revenue by twelve and call it a forecast. It’s another to think deeply about what that number actually means.

Used wisely, run rate helps you steer. Not with guesswork. But with disciplined, data-informed intention.

Start with the basics:

• Monthly revenue × 12 = Annual Run Rate
• Or: Weekly revenue × 52
• Or: Quarterly revenue × 4

Simple math, yes. But forecasting well means asking better questions:

Is this month’s revenue normal or an outlier? What would this number look like over time, with churn? With growth? With seasonal trends?

Here are five ways to go from simple calculation to strategic clarity:

1. Use a 3- to 6-Month Average

One good month doesn’t define a year. Neither does one bad one. Look at your past three to six months and average them. That gives you a clearer picture of your actual pace.

Think of it like running. Your time over a single mile isn’t your marathon pace. But your average over six miles? That’s more telling.

2. Adjust for Churn

Churn eats future revenue. Don’t ignore it.

Whether you’re losing subscribers or recurring donors, factor in your monthly attrition rate. If you keep 90 percent of customers each month, your forecast needs to reflect that 10 percent drop.

A run rate that assumes perfect retention isn’t just optimistic. It’s inaccurate.

3. Account for Seasonality

Every industry has its rhythms.

Nonprofits often see spikes in November and December. Retail peaks in Q4. B2B contracts might close in waves.

Don’t let a seasonal high or low mislead your projection. Use historical data to smooth the curve.

4. Incorporate Growth Cautiously

You’re likely planning to grow. But how fast? And how predictably?

If you’re ramping up ads, launching new campaigns, or opening new channels, estimate the likely lift. But be conservative. Overpromising helps no one.

Include a “what-if” scenario. One based on today. One based on intended growth. Use both for planning.

5. Track ARPU and Retention Trends

Increasing average revenue per user (ARPU)? Great. That means your run rate may be understated.

Declining retention? That’s a red flag.

Pair your run rate with these metrics to get a more complete financial picture.

In short, use your run rate as a mirror, not a mask.

It reflects what’s happening now. But with the right lens, it also reveals how you need to lead, where to tighten, where to invest, and where to shift.

Used prayerfully and strategically, run rate doesn’t just forecast revenue. It forms wisdom.

Over to You

Forecasting is rarely perfect, but it doesn’t have to be. What matters more is the posture we take as we look ahead.

Revenue run rate offers something better than certainty. It offers perspective.

When I first used it in that revenue summit, we didn’t walk away with a guarantee. We walked away with clarity—and clarity led to better questions, better strategy, and better stewardship.

That’s the gift of run rate. Not in the number itself, but in what it reveals:

Where are we growing? Where are we leaking? What decisions will shape what comes next?

Whether you're leading a business, building a product, or running a nonprofit, you’re called to lead with wisdom. That means paying attention, not just to results, but to direction.

Run rate won’t answer everything. But it will help you ask the right questions. And asking the right questions is where leadership begins.

Let the numbers speak. But more importantly, listen well. Then lead with both conviction and humility.

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