Sales Forecast Formula: Calculate Projected Revenue
The sales forecast model compounds your starting MRR by a monthly growth rate and adds pipeline each month (opportunities times conversion times deal size). It reports projected MRR and cumulative revenue at your chosen horizon.
Bottom Line
The sales forecast model compounds your starting MRR by a monthly growth rate and adds pipeline each month (opportunities times conversion times deal size). It reports projected MRR and cumulative revenue at your chosen horizon.
Sales Forecast Calculator
Forecast MRR and cumulative revenue from growth, conversion, and pipeline assumptions.
On This Page
Formula
Copy the exact expression or work through it step by step below.
Projected MRR (each month) = Current MRR x (1 + Monthly Growth) + New Opportunities x Pipeline Conversion x Average Deal Size, compounded over the forecast months Variables
PM
Projected MRR
Recurring revenue at the forecast horizon, in currency units. The primary output after compounding each month.
SM
Starting MRR
Recurring revenue at month zero, in currency units. The base the model compounds.
MG
Monthly Growth
Organic month-over-month growth of existing MRR, as a percent. Compounds each month and is the biggest long-horizon lever.
NO
New Opportunities
New pipeline opportunities entering each month, as a count. The top-of-funnel volume.
PC
Pipeline Conversion
The share of opportunities that close, as a percent. Multiplies opportunities into won deals.
ADS
Average Deal Size
The average recurring revenue per won deal, in currency units. Multiplies converted opportunities into new MRR.
Step By Step
- 1
Set the baseline case with the real calculator inputs.
Starting Mrr = 80,000, Monthly Growth Percent = 5.00%, Pipeline Conversion Percent = 22.0%, Avg Deal Size = 1,200
- 2
Enter pipeline conversion as a percent; the tool divides it by 100. Make sure it reflects opportunity-to-close, not opportunity creation, so won deals are not overcounted.
A 15% close rate is entered as 15; the model applies 0.15.
- 3
Apply the formula and read the first calculator outputs, not just the headline assumption.
The calculator lands with projected mrr at horizon at $311,753 and cumulative forecast revenue at $2,332,421.
- 4
Re-run with conservative, expected, and optimistic conversion rates to produce a forecast range instead of a single fragile number.
At the defaults, moving conversion from 10% to 20% lifts projected MRR from about $220,071 to $296,473, since starting MRR and organic growth also drive the total.
Worked Example
Sales Forecast sample case
Starting Mrr
80,000
Monthly Growth Percent
5.00%
Pipeline Conversion Percent
22.0%
Avg Deal Size
1,200
New Opportunities / Month
40
Forecast Months
12
Each month MRR grows 5% and adds 40 opps times 22% times $1,200 = $10,560 of pipeline. Compounded over 12 months from $80,000, projected MRR reaches $311,753.
The calculator lands with projected mrr at horizon at $311,753 and cumulative forecast revenue at $2,332,421.
Common Variations
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FAQ
Questions people ask next
The short answers readers usually want after the first pass.
Sources & References
- Forecasting Revenue: A Guide for Businesses — Investopedia
- The Ultimate Guide to Sales Forecasting — HubSpot
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