How to sell 100 million a year: the recurring revenue formula
By Jorge Avila Meléndez · updated Wednesday, September 30, 2026 · 7 min read
Billing 100 million a year sounds far off when today you close a couple of contracts a month. But the figure doesn't come from one huge deal: it comes from adding recurring revenue year after year, making sure it renews and growing the team that sells it. Here is the formula, with numbers, and a simulator so you can find yours.
The formula in one line
Billed in the year = renewed base × 12 + new MRR of the year × 6.5
- New MRR: the monthly recurring revenue your team adds during the year. If each rep has a 300,000 goal, by year end they bill 300,000 more every month (not in total). It is the same goal explained in what MRR is.
- × 6.5: sales land throughout the year, not all in January. On average, each new sale bills 6.5 months in its first year.
- Renewed base: at the start of the next year, the part of what was sold before that renews. With 80% renewal, out of every 100 in recurring revenue, 80 stays, and that base bills all 12 months.
An example: 300k per rep, one new rep every year
A goal of 300,000 in new MRR per rep, growing 5% a year; an average deal of 50,000 a month; you start with one rep, add one every year and renew 80%:
| Year | Reps | Renewed base (month) | New MRR (month) | Billed in the year |
|---|---|---|---|---|
| 1 | 1 | $0 | $300,000 | $1.95M |
| 2 | 2 | $240,000 | $630,000 | $6.98M |
| 3 | 3 | $696,000 | $992,250 | $14.8M |
| 5 | 5 | $2.19M | $1.82M | $38.2M |
| 8 | 8 | $5.78M | $3.38M | $91.3M |
| 9 | 9 | $7.32M | $3.99M | $113.8M 🎉 |
In year 9 you cross 100 million. Almost 80% of that figure is renewed base: what the team sold in previous years and managed to keep.
On your own, you don't get there
With the same numbers but without hiring anyone, you bill $11.7M in year 5, about $18M in year 9 and about $26M in year 15. You don't reach 100 million within 30 years.
The reason is renewal: every year you lose 20% of the base, and at some point what a single person sells barely replaces what leaves. With 80% renewal, one rep's base stops growing at about 4 times the MRR they sell in a year. To keep growing you need to sell more, renew more or have more people selling.
Deal size sets the pace, not the revenue
If the goal is MRR, the average deal size doesn't change how much you bill: it changes how many times you have to sell.
- With a 50,000 deal, the 300,000 goal is 6 sales a year: one every 61 days. On the days without a sale counter, that's 🦖 Extinct between sales.
- With a 5,000 deal it's 60 sales: one every 6 days (😎 Lukewarm).
When every sale is big, the risk is getting used to going weeks without closing. With the full team the picture changes: in year 9, nine reps close 81 sales and the company counter resets to zero every 5 days.
The levers that save the most years
On the same example, changing one thing at a time:
- Two new reps per year instead of one: you get there in year 7 (2 years sooner).
- Renew 85% instead of 80%: year 8.
- A 10% higher goal per rep: year 8.
- The goal grows 7% a year instead of 5%: year 8.
Growing the team is the strongest lever, but renewal is the cheapest: looking after your current customers costs less than winning new ones.
How to use it with your team
- Open the simulator and enter your numbers: goal per rep, deal size, renewal and how many people you plan to add.
- Look at the year you cross the goal and, above all, at how often a sale has to close. That's the pace your team has to keep.
- Turn the result into the year's goal (how to set and split the goal explains how) and follow it every morning with the counter.
Inside Back to Zero, the simulator starts with your real data: your goal, your active reps, your average deal over the last 12 months and your current recurring revenue.