Burn Rate & Cash Runway Calculator
Model your exact cash-zero date, monthly gross vs. net burn rates, and runway duration. Designed with dual frameworks for bootstrapped small businesses and venture-backed growth startups.
Cash & Monthly Operations
Cash FlowsSolvency & Runway Trajectory
Live Master Runway & Burn Report
Simulating cash runway and solvency...
Understanding Your Cash Runway
Runway measures how long your business can keep operating before bank balances hit zero. For bootstrapped companies, it is the margin of safety between your current sales and your overhead. For venture-backed teams, it marks the deadline to either close another funding round or reach profitability.
Gross Burn vs. Net Burn
- Gross Burn is the total cash leaving your bank account every month to pay expenses, regardless of what you make. If payroll is $11,500, rent is $2,200, and operating bills are $4,500, your gross burn is $18,200 per month.
- Net Burn is the actual cash you lose each month after accounting for incoming sales. If you spend $18,200 and bring in $8,500 from customers, your net burn is $9,700 per month.
Your runway depends entirely on your net burn. If revenue matches or exceeds expenses, net burn drops to zero, and cash reserves stop shrinking.
The 6-Month Planning Threshold
When runway drops below six months, operational flexibility disappears:
- Small businesses lose room to negotiate with suppliers, absorb delayed client invoices, or secure emergency credit lines.
- Startups lose bargaining leverage with investors. Institutional funding rounds take anywhere from four to six months to close. Starting the process with less than six months of cash frequently forces founders into punitive bridge financing or sudden layoffs.
Treat six months of runway as an operating deadline, not a comfortable buffer.
Operational Benchmarks by Runway Duration
| Available Cash Runway | Operating Position | Action for Bootstrapped Businesses | Action for Venture Startups |
|---|---|---|---|
| 18+ Months | Low Risk | Reinvest profits into growth channels that have proven returns. | Focus on hiring, product development, and customer acquisition. |
| 12 to 18 Months | Stable Buffer | Maintain spending discipline; monitor margins and invoice collections. | Track acquisition efficiency; begin informal investor conversations. |
| 6 to 12 Months | Tightening Window | Audit recurring software, freeze non-essential hiring, and push sales cycles. | Begin formal pitch deck updates and launch fundraising meetings. |
| Under 6 Months | Critical Zone | Cut discretionary overhead immediately; negotiate payment terms with vendors. | Freeze all hiring; secure inside bridge capital or cut expenses to reach break-even. |
Frequently Asked Questions
Divide your total liquid cash reserves by your monthly net burn rate:
If you have $120,000 in the bank and lose $9,700 each month after sales, your runway is roughly 12.4 months.
Burn multiple measures capital efficiency by dividing net burn by net new revenue over a given period:
A startup burning $1.50 to generate $1.00 of new ARR has a burn multiple of 1.5x. Venture investors look for multiples under 1.5x. If you run a bootstrapped business, agency, or retail shop, this metric is irrelevant. Your primary concern is eliminating net burn entirely.
- Change billing cycles: Offer customers a 5% to 10% discount for paying invoices annually or upfront rather than monthly.
- Audit recurring overhead: Cancel unused software seats and renegotiate service contracts that auto-renewed.
- Tighten accounts receivable: Reduce invoice payment terms from net-60 to net-30, and actively follow up on overdue client balances.
- Pause speculative marketing: Stop spending on unproven advertising channels and redirect effort toward existing customers and high-intent referrals.