Calculating Your Revenue

How to generate more revenue is an endless topic. There are many ways to do this, but none of them should be done without testing concepts first. This article will go into detail about one way to increase your business’s revenue- generating capabilities that can be adapted for any type of business.

The tool we will look at was created by Jared Betts, owner of Betts Advertising Agency in Orlando, Florida. He designed it to help his own businesses grow, so he made it available as free content. But even if you are not him, this calculator can still help you find new ways to boost income.

Betts says his favorite part of this calculator is how easy it is to use. Even people who have no experience running ads can create effective campaigns using this software. It also has several advanced features that most other similar calculators lack. These include creating ad groups, editing metrics, and tracking results.

This article will give you all the information you need to effectively use this powerful tool.

Calculate your monthly revenue

revenue generation calculator

The next step in creating your business is calculating how much money you will make every month. This is called monthly income or revenue generation. It is very important to know this information up front!

Most entrepreneurs underestimate how much they will be earning per month at first. They believe that their earnings will drop off as time goes on, but that isn’t always the case.

It's true that there are costs associated with running a business (office supplies, marketing materials, website fees, etc.), but many of these expenses come down significantly over time.

By keeping up with regular maintenance, most businesses will find that their overall revenues increase substantially. It's easy to overlook these things when you're spending all day working and going after what seems like the quick payday, but later you'll be stuck paying for them.

That's why it's so crucial to have a solid handle on your monthly income. You want to make sure that you've got enough coming in to cover your overhead.

Multiply your monthly revenue by 12

revenue generation calculator

Now that you have an idea of what types of services or products you offer that could generate income, it is time to evaluate how much money you would make in a month!

We used our example’s business to determine how many months it would take for their monthly income to reach the yearly average. In this case, it took just over one year!

By multiplying their monthly revenues times twelve, we can come up with how much money they would earn in a year. For our examples, this equals $4,032!

This seems like a very substantial amount of money but there are ways to save money if not all of these items are free. You do not need every item here to begin making more money quickly.

It will take some work to get this number down but once it does, you will feel comfortable about starting to bring in extra income.

Multiply your monthly revenue by 9

revenue generation calculator

Nine is a simple multiplier you can use to determine how many months it will take for you to break even if you are investing in strategies that do not work. This number represents the average amount of time it takes to make back what you invest in direct sales programs.

The reason this is important is because most people who begin internet marketing spend the majority of their time trying new tactics, experimenting with different strategies, changing things around, and testing out various products and services.

By adding up all these costs, the cost of living while working online, and the expenses related to running your business, breaking even happens much faster than when you only have one investment or piece of equipment.

That’s why it is crucial to focus on generating income instead of spending money to try and keep your business afloat. It's more efficient to go into debt to stay in business!

Once your budget is set and you have determined whether or not you should give up and stop investing, then you can start looking at ways to generate additional income.

Calculate your annual revenue

revenue generation calculator

The next thing you will want to do is calculate how much money you would make as an entrepreneur in one year. This is called your yearly income or, more commonly, monthly gross revenues. Monthly gross revenues are just what it sounds like-the amount of money that you earn per month from all sources.

Your monthly gross revenues include the salaries for employees you have, any business loans or lines of credit you take out, any royalties or affiliate fees you receive, and anything else you sell online or through other channels. For example, if you run a restaurant, your monthly gross revenues also includes what you spend on food!

To find your yearly income, simply add up all of these monthly incomes and divide this total by 12. An easy way to remember is instead of dividing by twelve, round down and multiply so that it looks nicer!

For instance, if your monthly gross revenues were $5,000, then your yearly income would be $50,000.

Calculate your monthly spending

revenue generation calculator

The next step in creating a successful business is figuring out how much money you spend every month! This is one of the most important steps, as you want to make sure that you have enough to survive financially while you are investing in your business.

It's very common for new business owners to overspend due to excitement or stress. You should be aware of this so that you can prevent it by learning more about the average costs of running a business.

By having an understanding of what things cost, you will know whether or not your business budget is within limits.

You don’t need to understand exactly how expensive everything is, but you should at least be familiar with what normal expenses are. It’s best to just do some research and figure out what averages exist for your area and genre.

Once you have those numbers, add them up and see where your overhead falls on the income scale. Make changes if necessary by going lower than average (save some cash!) or higher (you could try buying less popular products or offering services that people don’t normally pay for.

Multiply your monthly spending by 12

revenue generation calculator

The multiplication of your monthly expenses by twelve is a good way to determine how much money you are wasting due to excessive shopping sprees. By knowing this, you can take action to stop spending more than necessary!

By using our revenue generation calculator you will find out what products and services bring in the most income for us and then you can decide if these things are worth it or not. You can also compare your own budget with ours to see where savings can be found.

Multiply your monthly spending by 9

revenue generation calculator

Nine is a simple way to determine how much money you are wasting due to excessive daily, weekly or monthly spending habits. All you have to do is multiply your current monthly spending by nine and then divide that number by one month to get your total yearly spending.

So if your monthly spending is $1,500, then multiplying your monthly spending by nine gives us $15,000 as our annual spending amount.

Divide this number by twelve to find the average per-month spending level. In this case it is $17,167 which means we spend an average of $17,167 per month!

This seems high because it includes things like rent, bills and other expenditures but for now just focus on daily spending items such as food, transportation and shopping.

Now imagine what would happen if you were able to reduce your monthly spending to only $5,000? You would save over $4,000 a year! The same goes for reducing your weekly spending from $700 to $100 or your daily spending from $300 to $20.

Calculate your target revenue to reach in one year

revenue generation calculator

Now that you have an idea of how much money you want to make, it is time to calculate how many sales you will need to achieve this goal!

The most common way to do this is by using what is called a conversion rate or CVR (for conversion vaulue). This is determined through research and experimentation, and uses statistics to determine the average amount of time it takes to bring a buyer under your brand before they purchase a product or service.

By figuring out how long it takes to meet this CVR, we can multiply this number by the price of your products and services to get your target revenue.

Another way to look at this is to use the opposite of the conversion ratio. What we call the ACR (average cost per response) works like a discount when calculating income!

This calculates the average total spent on a product or service after it has been sold which gives us our CVR. We then divide the two numbers to find our target revenue.

About The Author

Tiara Ogabang
Tiara Joan Ogabang is a talented content writer and marketing expert, currently working for the innovative company With a passion for writing and a keen eye for detail, Tiara has quickly become an integral part of the team, helping to drive engagement and build brand awareness through her creative and engaging content.
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