Business Growth Rate Calculator
This calculator measures business growth in two ways: simple period-over-period growth rate (useful for comparing consecutive periods like month-over-month or year-over-year) and compound annual growth rate (CAGR, the standard measure for multi-year growth comparisons). Enter your starting value, ending value, and number of periods to get both metrics, a doubling time estimate, and a projection of future value at your current growth rate.
Growth rate and CAGR formulas
Total Growth Rate (%) = (End Value - Start Value) / Start Value x 100
CAGR = (End Value / Start Value)^(1 / Years) - 1
Doubling Time = ln(2) / ln(1 + CAGR)
Projected Value = End Value x (1 + CAGR)^Projection Years
CAGR is the standard metric used by the U.S. Securities and Exchange Commission (SEC) in its guidance on presenting growth rates in financial disclosures and investment materials.
Using growth rate metrics in practice
- Use CAGR to compare growth across companies or time periods with different lengths. It normalizes for the compounding effect.
- Period-over-period growth (year-over-year or month-over-month) is better for detecting recent acceleration or deceleration in a trend.
- Compare your CAGR to industry peers and to your cost of capital: growth below your cost of capital may indicate value is being destroyed.
- Use the projected value to set realistic long-term targets: if current CAGR continues, where will revenue be in 5 years?
- Track multiple metrics (revenue CAGR, customer CAGR, profit CAGR) to identify whether growth is profitable or driven by losing money on each sale.
Business growth rate: frequently asked questions
What is a business growth rate?
A business growth rate measures the percentage change in a key metric (revenue, customers, units sold, profit) between two periods. A positive growth rate means the metric increased; a negative rate means it declined. Growth rates are fundamental to tracking business health and setting targets.
What is CAGR?
Compound annual growth rate (CAGR) is the annualized rate at which a value grows from a starting point to an ending point over multiple years, assuming growth is reinvested (compounded) each year. CAGR smooths out year-to-year volatility and is the standard metric for comparing growth over multi-year periods. Formula: CAGR = (End Value / Start Value)^(1/Years) - 1.
What is a good revenue growth rate?
Growth rate benchmarks vary significantly by stage and industry. Early-stage startups may target 10-20% monthly. Established small businesses often aim for 10-25% annually. Enterprise companies may consider 5-10% annual growth healthy. Compare your growth rate to industry peers and prior periods rather than using a single universal benchmark.
What is the Rule of 72?
The Rule of 72 is a quick approximation: divide 72 by the annual growth rate percentage to estimate the number of years required to double a value. For example, at 12% annual growth, a value doubles in approximately 72/12 = 6 years. This is an approximation; the exact doubling time uses the natural log formula.
How do I calculate month-over-month growth?
Month-over-month growth (MoM) = (Current Month Value - Prior Month Value) / Prior Month Value x 100. For example, if revenue was $80,000 last month and $90,000 this month, MoM growth is (90,000 - 80,000) / 80,000 x 100 = 12.5%. The same formula applies to any period comparison.
Official sources
- U.S. Securities and Exchange Commission: SEC guidance on non-GAAP financial measures (includes growth rate presentation standards).
- Bureau of Economic Analysis: GDP Growth Rate Data (macroeconomic growth benchmarks).
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.