Calculating your turnover

What is turnover?

The turnover of your company is its total income from the sales of products or services over a certain period. This is also called gross turnover.

What is net turnover?

Net turnover is your gross turnover minus discounts you give to customers, and items returned. Excluding VAT.

How do I calculate how much turnover I need?

Your required turnover is the amount you need to live on and pay your expenses.

• Calculate how much you need to live on. Such as rent or mortgage, groceries, holidays, and energy.
• Add to this the income tax you expect to have to pay on the income that should come from the business. You now have the minimum amount that you need to come from your business.
• Calculate your company costs such as the rent for your business premises, personnel costs and the cost of a company car.
• Calculate the purchase value of your turnover and add it up.
• You now have the net turnover you need to live on and pay your expenses.

Charge your client the required turnover, plus the VAT rate that applies to your product or service.

Estimate your turnover

There are several methods to estimate your turnover. The sector you operate in determines which method to choose. If you work on an hourly rate, your calculation method will be different from someone who sells products, for instance in a bar or a shop.

Calculation methods

• Customer groups: estimate the number of customers, and multiply by the average amount spent per customer. For example: a lunchroom opens 6 days a week, and closes 4 weeks a year for holidays. On average, there are 30 customers a day. 30 customers a day x an average spend of €15 = €450 a day x 6 days = €2,700 per week x 48 weeks = €129,600 turnover per year.
• Product groups: calculate the turnover share per product group. Multiply the number of products x their sales price. For example: you run a computer store, that opens 6 days a week for 48 weeks a year. On average, you sell 3 laptops per day plus 2 tablets. Your turnover will then be: ((3 x €700) + (2x €400)) x 6 = €17,400 a week, and €17,400 x 48 = €835,200 per year.
• Hours: billable hours are hours you can charge to your client. Multiply the number of billable hours by your hourly rate. For example: You work as an advisor for 8 hours a day and 5 days a week. Per year, you take 30 days off. So, in total you work for 46x5 = 230 days a year. The number of hours per year is 230x8 = 1,840. Deduct from this number the hours you spend on travel, acquisition, and keeping records, say 940 hours. This leaves 900 billable hours. Your turnover will be 900 billable hours times your hourly rate of €100 = €90,000 per year.

You do not include VAT in your calculation methods.

How likely are you to realise your required turnover?

By calculating your turnover, you can see whether your planned turnover is realistic and achievable with the resources you have. Or whether you may need to make some adjustments.

For example: you rent out bicycles from Monday to Friday. During the 8 hours you open, you rent out 5 bikes per hour at a rate of €8, so 40 bikes per day for €320. Your monthly turnover will never exceed €6,400. But you have calculated that you need €7,000 turnover per month to cover your private and business needs. So, you fall €600 short in this example. You could try to increase the number of bicycles you rent out, or increase the prices to meet your target.

Tips for calculating your turnover

When calculating your turnover, ask yourself:

• does your turnover rely on seasonal or other influences? (For instance, if you sell virtual postcards, you will see a spike in turnover around holidays like Christmas.)
• have you just started your business? It may take a while to get up to speed, and your initial turnover will be lower.
• Compare your turnover to other turnover figures in your sector.

Find data for your sector in our Facts and Figures section.