Forums: Discussions for entrepreneurs and small business.

Ok. Ok. I`ll probably catch a lot of hype about this one. But I`ve searched far and wide online yet, can`t find anything on the internet concerning an actual formula to calculate the sales growth of your business.

I`m classifying this one as algebra since there is a formula involved. Me and algebra don`t see eye to eye.

So go ahead with your ribbing but please let me know which figures are divided by which figures and the best way to calculate the growth of your business. I see the numbers (which are impressive to me) but I`ve got to know what they mean and where they are taking me.

Thanks in advance.

Dan

Hi Dan,

I don`t think anyone here would ever rib you for this - we`re all here to learn and you can darn bet that you know a lot of things others here don`t know.

To answer your question, here is the formula:
(SalesThisYear - SalesLastYear) / SalesLastYear = SalesGrowth

Example:
Sales in 2006 = $500,000
Sales in 2007 = $800,000
SalesGrowth = (800,000-500,000) / 500,000 = 60% sales growth
You can check this by multiplying the 2006 sales by 1.6 - you get the $800,000
Shoot me an email if you want a quick spreadsheet to calculate this.

Now what that actually means is another story - you might want to think about analyzing profit instead of gross sales revenues.  You`re going to find a lot of opinions out there on this one - I for one concentrate on the bottom line (profit) instead of the top line (revenue).

Eric,

My man, you are a life saver. I`ve got my gross sales showing versus my pure profit once losses and payouts are subtracted. Would you believe my business is 100% debt free? So that means more profit in the coffers.

Thankfully, my business has been simplified to the point where I can concentrate on the areas I lack in. It`s not the bottom line or the top line since every year I show in the green. It just keeps getting better and better.

The main point of interest is to make sure I effectively market it now. Would you believe in the year of 2007, I had sales every week showing except 8 weeks? Since I`ve started my growth analysis (something I had failed to do until this point), I really didn`t realize how well my business was doing. The growth analysis is very important to see where the business is headed. I can focus on which weeks have the strongest sales, compare the current weekly revenues to last years for a pointed expected growth so that I may set a quota so to speak for my business.

I hate to sound like I`m blowing my own horn but this is after building a website with an ecommerce company I love starting in late 2005. I`ve had to learn and teach myself pretty much everything I know (it isn`t much so don`t pat me on the back yet) and I`ve only ever advertised once in a publication for this business. I don`t believe in allocating a budget to an expenditure which when properly managed can give you pretty good results using free resources.

Well, enough about me. I`m telling you. You, my friend, are on my favorites list now. Tell me if you ever, ever need any help whatsoever with anything. I`ll see what I can do to help you.

Dan

Hi Dan,

I got your email with the sales data and your spreadsheet is on its way.  Enjoy!

Thanks again Eric.

Just having one of those days.

Later!

Dan

I don't think you can accurately forecast a business given all the variables. Any projection you'd make would simply be a best case or worst case scenario.

-SO

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To calculate percentage growth do the following three-step calculation.

Let's say your sales this year were $1 million. Last year, your sales were $750,000.

First, subtract last year's sales from this year's sales.
So, $1 million - 750,000 = 250,000

Then, divide the answer by last year's sales.
So 250,000/750,000 = .33

To express this as a percentage, multiply the decimal by 100
So .33 x 100 = 33

Your year-to-year percentage annual growth is 33%.

Let's recap:

Current Sales - Previous Sales
_______________________ x 100 = Percentage Growth
Previous Sales

Hi

I came across your post and this might help. I do not know about specific calculators for growth but there is an online software called Mind The Profit which is a simple income/expense organizing software supported on Google Cloud. 

It's quite impressive, actually. There are both free and paid versions. It's simple and easy to use and it gives you charts and graphs by which you can ascertain your business position for a given period, say half-yearly or quarterly. You can then compare the results and check your growth. 

Check it out! You might find it useful.  

Cheers

Wanda

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Wanda Johnson

Marketing

Mind the Profit