Burn rate and runway
Gross burn is everything you spend in a month. Net burn is spending minus revenue: the amount your bank balance actually falls. Runway is how many months that balance lasts at the current net burn.
Runway (months) = Cash ÷ Net burn
With a growth rate entered, the calculator steps forward month by month and raises revenue each month. Either the cash runs out or revenue overtakes expenses, which is the break-even month.
Example
A business with $120,000 in the bank, $20,000 of monthly revenue and $35,000 of expenses burns $15,000 a month and has 8 months of runway.
How much runway is enough?
A common rule of thumb is to start raising money, cutting costs or arranging credit when runway falls below 6–9 months. Fundraising and loan applications usually take longer than expected. Use the break-even calculator to see what sales level stops the burn.
Frequently asked questions
Should I use average or current burn?
Use a recent 3-month average if expenses are lumpy, but watch for known upcoming changes like a new hire or annual insurance bill.
Does runway include credit lines?
Not here. Undrawn credit can extend runway, but borrowed money must be repaid. It's safer to plan on cash alone.
What if my burn is zero or negative?
Then the business is cash-flow positive and runway is unlimited at current numbers.