Burn Rate and Runway Calculator
Works out how fast cash is going and how long it will last.
Share sends a link that reopens these numbers. Copy details pastes the full breakdown as a list.
The formula
gross burn = cash spent per month net burn = cash spent − cash received runway = cash ÷ net burn
Gross burn is everything going out. Net burn allows for cash coming in, and it is the figure that sets the runway. When cash received covers cash spent there is no burn to divide by, so there is no runway figure.
What to watch out for
Use cash figures from the bank and not profit from the accounts. An average of the last three months is steadier than a single month, particularly if one had a large one-off payment.
Frequently Asked Questions
What is the difference between gross burn and net burn?
Gross burn is all the cash going out each month. Net burn takes off the cash coming in. Spending 80,000 and receiving 30,000 is a gross burn of 80,000 and a net burn of 50,000.
How do I calculate runway?
Divide cash by net burn. 600,000 ÷ 50,000 is 12 months.
What if the business has positive cash flow?
Then there is no runway figure, because cash is not running down. Net burn is zero, and the cash balance grows by the net cash flow each month for as long as that continues.
How can runway mislead?
It assumes this month’s burn continues. New hires, a lost customer or a one-off receipt can all shift it quickly, and a growing business often burns more over time, so the real runway can be shorter.