How to Work Out Your Cash Runway

Runway is how many months you can keep operating with the cash you have. Divide your cash balance by your monthly net burn.

Gross burn and net burn

Gross burn is everything you spend in a month. Net burn is what you spend minus the cash you collect. Use net burn for runway, and average it over three months so one large invoice doesn’t distort it.

Test decisions before you make them

Before you hire or change prices, run the change through a forecast. A new hire is a known monthly cost, so you can see the effect on runway straight away.