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Month-over-month (MoM) growth is a critical metric that provides insight into the short-term performance of a business. It helps you understand how a specific value, such as revenue, active users, or any other key metric, changes from one month to the next. By accurately measuring MoM growth, businesses can identify trends, make informed decisions, and adapt strategies for sustainable growth. This guide will explore the meaning of month-over-month growth, the formulas used to calculate it, and common pitfalls to avoid.
\n\n\n\nMonth-over-month growth refers to the percentage change in a specific metric from one month to the next. It’s a granular measure that provides insight into a business’s growth trajectory, helping identify short-term trends and assess the effectiveness of strategies. This metric is handy for startups and early-stage companies that need to track rapid changes in their performance.
\n\n\n\nUnderstanding how your business performs month-to-month can be invaluable for making strategic decisions, attracting investors, and identifying growth opportunities. MoM growth is often used to track revenue, user acquisition, and customer retention, offering a clear view of how these factors evolve. By monitoring these changes, businesses can adapt their strategies to optimize growth.
\n\n\n\nTo calculate month-over-month growth, use the following formula:
\n\n\n\nMonth-Over-Month Growth (%) = (Current Month Value − Previous Month Value / Previous Month Value) × 100
\n\n\n\nFor example, if your business had 200 active users in January and 240 in February, the calculation would be:
\n\n\n\n(240 − 200 / 200) × 100 = 20%
\n\n\n\nThis indicates a 20% growth in active users from January to February.
\n\n\n\nWhen dealing with multiple months of data, the compound monthly growth rate (CMGR) can provide a more comprehensive view of growth trends. CMGR assumes a constant growth rate over a period and is calculated using the formula:
\n\n\n\nCMGR = (Final Month Value / Initial Month Value) 1 / Number of Months − 1
\n\n\n\nFor instance, if your user base grew from 1,000 in January to 5,000 in December, the CMGR would be:
\n\n\n\n(5000 / 1000) 1 / 11 − 1 = 14.35%
\n\n\n\nThis indicates an average monthly growth rate of 14.35% over the year.
\n\n\n\nOne common error is presenting growth rates based on small absolute numbers, which can create an exaggerated perception of success. For example, increasing from 10 to 20 users represents a 100% growth rate but doesn’t reflect substantial business progress. Ensure that growth rates are contextualized with absolute numbers to provide a more accurate picture of performance.
\n\n\n\nGrowth can fluctuate significantly month-to-month, leading to misleading conclusions if not properly accounted for. Avoid flattening these fluctuations into a single growth rate without considering the underlying variability. Instead, present growth as a range or use absolute numbers to represent your business trajectory better.
\n\n\n\nLinear growth involves adding a constant number each month, while exponential growth compounds the previous month’s growth. It’s essential to distinguish between these two patterns, as misrepresenting linear growth as exponential can lead to unrealistic projections and expectations.
\n\n\n\nMoM growth is vital for tracking short-term performance and identifying trends that might not be visible in broader time scales. It allows businesses to respond quickly to changes, adjusting strategies and operations based on real-time data.
\n\n\n\nInvestors are often interested in a company’s growth metrics, as they provide insight into its potential for future success. Demonstrating consistent MoM growth can enhance your company’s attractiveness to investors by showcasing steady performance and progress.
\n\n\n\nBy monitoring MoM growth, businesses can make data-driven decisions that align with their goals. Whether optimizing marketing campaigns, adjusting pricing strategies, or enhancing product offerings, understanding MoM trends helps refine tactics to achieve desired outcomes.
\n\n\n\nCalculating month-over-month growth is essential for businesses aiming to optimize performance and achieve long-term success. By understanding how to calculate month-over-month growth, interpreting results accurately, and avoiding common mistakes, you can leverage this metric to guide strategic decisions and drive sustainable growth.
\n\n\n\nReady to elevate your business with actionable insights? Modeliks offers comprehensive tools and resources to help you track and analyze key growth metrics, empowering your business to reach new heights. Explore our Modeliks today to see how we can support your growth journey. Start your free trial!
\n","slug":"how-to-calculate-month-over-month-growth","date":"2024-08-12T12:14:19","categories":{"nodes":[{"id":"dGVybToxMQ==","name":"Business Plans"}]},"mainCategory":{"mainCategory":["business-plans"],"videoHeader":null},"tags":{"nodes":[{"name":"financial reporting"}]},"featuredImage":{"node":{"id":"cG9zdDoyNjM1","sourceUrl":"/images/cms/Modeliks-6.jpg","altText":"Modeliks guide explaining how to calculate month over month growth with examples, formulas, and tips for accuracy."}},"seo":{"metaDesc":"Learn how to calculate month over month growth to track business performance and make informed decisions. Explore Modeliks today!"},"modified":"2024-08-12T12:14:20","related":[{"id":"cG9zdDoxMTU0MQ==","title":"How Accountants Can Offer High-Margin Advisory Services","content":"\nThe accounting profession is shifting. Compliance and bookkeeping remain essential, but today’s clients expect more. They want guidance on how to run their business smarter, manage cash flow, and plan for the future.
\n\n\n\nAccording to a CPA.com survey:
\n\n\n\nThis means the demand is already there. The opportunity for accounting firms is clear: move beyond bookkeeping into high-margin advisory services.
\n\n\n\nFor most small and mid-sized firms, the hesitation is simple:
❌ Limited staff time
❌ No standardized tools for forecasting & reporting
❌ Concern about overcomplicating workflows
The good news? Advisory can be delivered at scale, without adding headcount or creating inefficiencies — if you have the right system.
\n\n\n\nModeliks helps accountants transform their existing relationships into advisory partnerships by automating the heavy lifting.
\n\n\n\nHere’s how it works in practice:
\n\n\n\n1️⃣ Connect QuickBooks in Minutes
Sync client actuals directly — no messy spreadsheets or manual imports.
2️⃣ Build Budgets & Automated Financials
Instantly generate a forward-looking P&L, Balance Sheet, and Cash Flow statement, tailored to each client.
3️⃣ Deliver Dashboards & Variance Analysis
Clients see Actual vs. Plan vs. Previous Periods. You provide insight into why numbers moved — without building reports from scratch each month.
Firms using Modeliks see:
✅ New revenue streams by offering planning & reporting as premium packages
✅ Higher client retention thanks to consistent value beyond compliance
✅ No extra headcount required, since processes are automated
✅ Improved positioning as trusted advisors, not just bookkeepers
As one accountant put it:
\n\n\n\n\n\n\n\n\n“Our clients can now make confident decisions. For us it’s a game-changer — we finally sell insight, not just compliance.”
\n
Client expectations are rising. Competitors are moving into advisory. Technology makes it easier than ever to scale.
\n\n\n\nIf you’re an accountant or firm owner, now is the time to position your practice for the next decade. Advisory services are not just an add-on — they’re the future of accounting.
\n\n\n\n📽️ Watch the full video playbook here: https://www.youtube.com/watch?v=UlQEwnWOdKQ.
🌐 Explore how Modeliks can help you launch advisory services in under an hour -> HERE.
📩 Or reach out to us directly to explore how Modeliks can be tailored for your firm.
\n\n\n\nEnjoy Modeliks! We know we are!
\n\n\n\nAuthor:
Modeliks Team
Running a professional services business is demanding. Whether you’re a founder, consultant, accountant, or finance leader, the challenges are similar:
\n\n\n\nThe truth? Many services firms outgrow spreadsheets faster than they realize. A project-based business requires a planning and reporting framework that adapts as you grow – not one that breaks every time a new client, project, or team member comes onboard.
\n\n\n\nThat’s where having a structured financial planning and reporting system becomes a game-changer.
\n\n\n\nThis strategic framework is designed for:
\n\n\n\nIf you run a project-based business, use timesheets, or manage multiple clients, this playbook is for you.
\n\n\n\nProfessional services firms often face profitability challenges because margins are tied to capacity, efficiency, and client mix. Here’s where the right planning approach makes a difference:
\n\n\n\nEach project has its own revenue, costs, and resources. Without project-level visibility, it’s impossible to know which work is actually profitable.
\n\n\n\nIt’s not enough to create a yearly budget. Monthly actuals vs. plan reporting helps you quickly see where projects are off track and adjust before problems snowball.
\n\n\n\nWhat happens if a big client leaves? Or if you add two more consultants next quarter? Scenario planning gives you the confidence to make tough decisions with numbers to back them up.
\n\n\n\nEmployee utilization is the heartbeat of a services firm. By linking financial forecasts to billable hours, staffing, and client demand, you can identify bottlenecks and prevent costly underutilization.
\n\n\n\nAt Modeliks, we’ve built a platform that turns these best practices into a structured, repeatable process.
\n\n\n\nWith Modeliks, you can:
\n\n\n\nMost firms wait until they have 100+ employees to rethink planning. But the truth is, dimensional planning and reporting matters at 20 employees, as much as at 200.
\n\n\n\nThe earlier you set up a scalable framework, the faster you can:
\n\n\n\nGrowing a professional services business isn’t just about winning more clients — it’s about building a system that lets you manage projects, measure performance, and grow profitably.
\n\n\n\nThat’s what this playbook is about — and why we built Modeliks.
\n\n\n\n👉 If you want to see how Modeliks can help you manage and grow your services firm, watch the full video walkthrough here.
\n\n\n\n📩 Or reach out to us directly to explore how Modeliks can be tailored for your firm.
\n\n\n\nEnjoy Modeliks! We know we are!
\n\n\n\nAuthor:
Modeliks Team
Today we released a massive new update of Modeliks. A multidimensional Modeliks 2.0. I am both happy and sad to see Modeliks grow up. I liked baby Modeliks. He was cute and a little clumsy. Now, we created a beast.
\n\n\n\nWe listened to your feedback and made Modeliks by far the best financial planning and reporting tool for SMEs. Alright, I might be a bit subjective, but here is what’s new:
\n\n\n\nAnd there is a lot more to come in the next few months. Stay tuned for new features, and in the mean-time, plan, manage and grow your business with Modeliks 2.0.
\n\n\n\nLet’s recap. Now you can:
\n\n\n\nEnjoy Modeliks 2.0! We know we are!
\n\n\n\nAuthor:
Modeliks Team