Business
Burn Rate Calculator
Works burn rate, where gross and net burn answer different questions.
Result
Assumes expenses stay flat while revenue grows, which rarely holds. Most businesses add cost as they scale. Treat the break-even month as a best case.
Get a Free Business AuditHow the calculation works
Gross burn is total cash spent in a period; net burn is that less cash received, which is the figure that actually depletes the balance. Both are useful: net burn tells you how fast the balance is falling and gross burn tells you how much the cost base would have to be cut to change it.
What moves the number
- Total cash operating costs.
- Cash revenue received, not invoiced.
- One-off items in the period.
- Whether the burn is stable or trending.
Where this one goes wrong
A burn rate taken from a single month is unreliable because of timing, so an average over several months is the figure to plan from, and a month containing an annual insurance payment or a tax instalment is not representative. Use a trailing average. The trend matters more than the level in a changing business, since a rising burn with flat revenue is a different situation from a stable one even at the same absolute figure.
Before you quote
- Use a trailing average rather than a single month.
- Separate gross from net burn.
- Strip one-off payments from the average.
Questions
About this calculator
What is the difference between gross and net burn?
Gross burn is total cash spent; net burn is that less cash received, which is what actually depletes the balance. Net burn tells you how fast the balance is falling, gross burn tells you how much cost there is to cut.
Which period should burn be measured over?
A trailing average across several months, since a single month is distorted by timing. A month containing an annual insurance payment or a tax instalment is not representative, and planning from it produces the wrong conclusion.
Does the trend matter more than the level?
In a changing business, yes. A rising burn against flat revenue is a different situation from a stable burn at the same absolute figure, and the trend is what indicates how much time there is to respond.
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How to use this calculator
- Cash in the bank ($). Enter your own figure; the page starts at $180,000.
- Monthly expenses ($). Enter your own figure; the page starts at $62,000.
- Monthly revenue ($). Enter your own figure; the page starts at $41,000.
- Monthly revenue growth (%). Enter your own figure; the page starts at 4%.
The result updates as you type, so you can try a figure, see what it does to net monthly burn, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Cash in the bank | $180,000 |
| Monthly expenses | $62,000 |
| Monthly revenue | $41,000 |
| Monthly revenue growth | 4% |
What comes out
| Result | Value |
|---|---|
| Net monthly burn main result | $21,000 |
| Runway at current burn | 9 months |
| Gross burn | $62,000 |
| Months to break even at that growth | 11 months |
Burning $21,000 a month leaves 9 months of runway. At 4% monthly growth you would break even in 11 months.
How sensitive the answer is
Holding everything else steady and changing only cash in the bank, this is what happens to net monthly burn. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Cash in the bank ($) | Net monthly burn |
|---|---|
| $90,000 | $21,000 |
| $135,000 | $21,000 |
| $180,000 example above | $21,000 |
| $270,000 | $21,000 |
| $360,000 | $21,000 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Cash in the bank ($)
- A money amount, starting at $180,000.
- Monthly expenses ($)
- A money amount, starting at $62,000.
- Monthly revenue ($)
- A money amount, starting at $41,000.
- Monthly revenue growth (%)
- A percentage, between 0 and 100, starting at 4%.
What the results tell you
| Result | What it is |
|---|---|
| Net monthly burn | The headline result. A money figure. |
| Runway at current burn | A number. |
| Gross burn | A money figure. |
| Months to break even at that growth | A number. |
Where these figures usually mislead
Business calculations assume the inputs are steady. Seasonality, a few large customers, and slow payment all break that assumption. A figure that looks healthy annually can still leave you short in a given month.
Keep going
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