Business
Runway Calculator
Works runway, where the constant-burn assumption is the weakness.
Result
Assumes burn stays constant. Seasonal trades should run this on a slow-season burn rate, since that is when runway actually gets tested.
Get a Free Business AuditHow the calculation works
Cash available divided by net monthly burn, giving the months before the balance reaches zero. The calculation assumes burn stays constant, which it rarely does, and it assumes the cash is all available, which committed or restricted amounts are not.
What moves the number
- Cash genuinely available and unrestricted.
- Net burn and whether it is trending.
- Committed future costs not in the current burn.
- Expected revenue changes.
Where this one goes wrong
Runway calculated on a flat burn understates the risk in a business whose costs are rising and overstates it in one about to cut, which means the useful version models the actual expected path rather than dividing by an average. Build the monthly forecast. Committed costs are the other omission, since a contract signed but not yet billing, or a hire about to start, is runway already spent and not yet in the burn figure.
Before you quote
- Model the expected monthly path, not a flat average.
- Include committed costs not yet in the burn.
- Exclude restricted or committed cash from the balance.
Questions
About this calculator
What is wrong with simple runway arithmetic?
It assumes burn stays constant, which it rarely does. The useful version models the expected monthly path, since a rising cost base shortens runway faster than the average suggests and a planned cut lengthens it.
What gets left out of runway?
Committed costs not yet in the burn: a contract signed but not yet billing, a hire about to start, an annual payment due. Each is runway already spent, and the figure that ignores them is longer than the reality.
When should action be taken?
Well before the runway runs out, because changing a cost base or raising money both take months. A figure that looks like enough time to act is frequently exactly the amount of time needed to act, which means starting now.
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How to use this calculator
- Cash available ($). Enter your own figure; the page starts at $150,000.
- Net monthly burn ($). Enter your own figure; the page starts at $25,000.
- Monthly costs you could cut ($). Enter your own figure; the page starts at $6,000.
- Expected funding or collections ($). Any lump sum you can rely on.
The result updates as you type, so you can try a figure, see what it does to current runway, 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 available | $150,000 |
| Net monthly burn | $25,000 |
| Monthly costs you could cut | $6,000 |
| Expected funding or collections | $0 |
What comes out
| Result | Value |
|---|---|
| Current runway main result | 6 months |
| Runway after cuts and funding | 8 months |
| Extra time bought | 2 months |
| Cash at zero in | 6 months |
You have 6 months of runway. Cutting 6,000 a month and adding 0 extends that to 8 months.
How sensitive the answer is
Holding everything else steady and changing only cash available, this is what happens to current runway. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Cash available ($) | Current runway |
|---|---|
| $75,000 | 3 months |
| $112,500 | 5 months |
| $150,000 example above | 6 months |
| $225,000 | 9 months |
| $300,000 | 1 yr 0 mo |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Cash available ($)
- A money amount, starting at $150,000.
- Net monthly burn ($)
- A money amount, starting at $25,000.
- Monthly costs you could cut ($)
- A money amount, starting at $6,000.
- Expected funding or collections ($)
- Any lump sum you can rely on.
What the results tell you
| Result | What it is |
|---|---|
| Current runway | The headline result. A number. |
| Runway after cuts and funding | A number. |
| Extra time bought | A number. |
| Cash at zero in | 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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