Table of Contents
- How can this Monthly Recurring Revenue Calculator help you?
- Make the business plan.
- Prepare forecast
- Make decisions based on data.
- How to use the MRR Calculator?
- Subscription price
- New customers
- The result
- How to calculate MRR?
- MRR formula
- What are the most common mistakes while calculating MRR?
- Similar tools
How can this Monthly Recurring Revenue Calculator help you?
This online MRR Calculator will let you forecast your future turnover from your subscription business. This information will not only help you predict the future, but lets you optimize your business.
Make the business plan.
Calculating monthly recurring revenue is the first step when planning a new SaaS business. It gives you perspective on the business's potential cash flows and revenue.
Future MRR is the best predictor of future company profitability. If you own an established subscription business and have some valid data, you could easily predict your MRR for the following periods.
Make decisions based on data.
MRR calculator will support you with introducing a new subscription model or changes in the pricing policy. Just fill out a different price and see how this could impact your future revenue.
How to use the MRR Calculator?
The usage of this MRR calculator is pretty straightforward. However, it is important to understand all the fields correctly to prevent misinterpretation.
The price of your monthly subscription. You can put an average value here if you have several different subscription types.
The number of new customers you gain each month.
The average number of customers that cancel their subscription each month.
The period in months for which you wish to see the result.
As a result of the calculation, you will see the value of your MRR after a given period and the total number of active customers then.
How to calculate MRR?
- Calculate the average monthly revenue from a single customer.
- Find out the number of new customers you get (or plan to get) each month.
- Estimate the number of customers that cancel the subscription each month.
- Decide on the length of the period you wish to calculate the MRR.
- Fill those values into the form above or substitute them with the MRR formula below.
MRR = Price * NewCustomers*Months - Price*Churn*(Months-1)
- Price - the average monthly cost of the subscription
- new customers - the number of new subscriptions each month
- Churn - the number of customers who quit each month
- Months - the period you wish to calculate MRR for
What are the most common mistakes while calculating MRR?
Although the MRR may seem like an easy concept, there are several very common mistakes investors make while calculating or interpreting its value.
- MRR is often mistaken for cash flow
- Trial subscriptions are treated as paid customers
- The monthly price is calculated incorrectly when different pricing strategies are used.
Make sure you don’t make any such mistakes while calculating MRR in order to get real results. It may have a crucial impact on your success.
If you wish to expand your business, Calcopolis is right for you. On this website, you will find many useful tools for small business owners.
You may find ROAS Calculator very useful if you run an online business.