Cash Flow Runway Calculator
Net Monthly Burn
$0
Runway
0 Months
Money Out Date
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How Long Can Your Business Survive? Find Out With Our Cash Flow Runway Calculator
Ever ask yourself, “How much time do we have before we run out of money?” It’s the single most important question for any startup founder or small business owner. The answer is your cash flow runway. Think of it as the financial lifeline for your business—it’s the exact number of months you can keep operating before your cash on hand runs out.
Knowing this number isn’t just about avoiding disaster; it’s about making smart decisions. A short runway signals it’s time to either cut costs, boost sales, or raise capital. A long runway gives you the freedom to invest, hire, and navigate unexpected challenges. Our calculator gives you this critical insight instantly.
How to Use Our Cash Flow Runway Calculator
Our tool is designed for simplicity and speed. You only need three key figures from your business’s finances to get a clear picture of your runway.
- Current Cash Balance: Enter the total amount of cash you have available across all your business bank accounts right now.
- Average Monthly Revenue: Look at the last 3-6 months and enter your average income per month.
- Average Monthly Expenses: Enter your average total costs for a typical month, including salaries, rent, marketing, and software—everything.
The calculator will instantly show your Net Burn Rate (how much cash you’re losing each month), your Runway in Months, and the Money Out Date when your funds are projected to be depleted.
How is Cash Runway Calculated?
The logic behind the calculation is straightforward, and understanding it helps you manage your finances better. It’s based on a simple formula that measures how quickly you are spending your available capital.
The formula is:
Cash Runway=Net Burn RateCurrent Cash Balance
Your Net Burn Rate is the key metric here. It’s the net amount of money your company loses each month. You find it by subtracting your monthly revenue from your monthly expenses. If your expenses are $45,000 and your revenue is $20,000, your net burn rate is $25,000. This figure is the foundation for forecasting your company’s financial future.
Why Your Startup’s Runway is So Important
Understanding your financial runway is more than an accounting exercise; it’s a strategic necessity. This single metric influences almost every decision you make.
- Fundraising Strategy: Investors will always ask about your runway. It tells them how urgently you need capital and how long their investment will last. A healthy runway gives you leverage in negotiations.
- Hiring Decisions: Can you afford to hire that new developer or marketing manager? Your runway provides the answer. It helps you scale your team sustainably without risking the company’s future.
- Spending & Budgeting: A clear runway forces financial discipline. It helps you differentiate between essential business expenses and “nice-to-have” costs, ensuring you allocate capital effectively to fuel growth.
Ultimately, managing your runway is about giving your business the time it needs to achieve profitability and become a sustainable venture.
Frequently Asked Questions (FAQs)
1. What is a good cash flow runway for a startup?
Most VCs and financial experts recommend having at least 12 to 18 months of runway. This provides a safe buffer to navigate market changes, achieve key milestones, and raise the next round of funding without being under extreme pressure.
2. How can I improve my cash runway?
You can extend your runway in two primary ways: decrease your monthly expenses (e.g., cut non-essential software, reduce marketing spend) or increase your monthly revenue (e.g., acquire new customers, raise prices). Securing additional funding also directly extends it.
3. What if my revenue is higher than my expenses?
If your revenue exceeds your expenses, you are “cash flow positive” or “profitable.” In this case, your runway is technically infinite as you are not burning cash. The calculator will show this as a profitable status, which is the ultimate goal.
4. How often should I calculate my cash runway?
You should calculate your runway at least once a month. For early-stage startups or businesses in a volatile market, checking it weekly is a good practice. Regular monitoring helps you stay ahead of potential issues and make proactive financial decisions.
5. Is burn rate the same as expenses?
No. Your expenses are the total costs of running your business. Your burn rate is the net amount of money you lose after accounting for revenue. If your expenses are $50,000 and revenue is $30,000, your burn rate is $20,000.