Calculating run rate
is fairly straightforward, though you will need at least a few months' worth of revenue data.
Here's the formula for calculating it annually: Revenue in period Z x # of periods Z in a year = Annual run rate
Firstly, you pick a certain time period to focus on. The easiest is a month. You focus on the revenue for that month and multiply it by 12 to get the year's worth of expected revenue.
In other words, if you made $10,000 in revenue for the month you're studying, you can multiply that by 12 to get $120,000 as your expected annual run rate and revenue based on the current conditions.
The formula may differ depending on the type of run rate you are calculating, but this is a general idea.
These calculations are straightforward and, as mentioned, assume the conditions will remain the same. If there's an increase in churn, expansion, upselling, or any changes, you will have to re-consider and re-calculate.
While it is a handy KPI to predict future growth and the size of your business to others, or when introducing it to prospective customers or investors, when it comes to crunching numbers you want to make sure you're taking everything into account.