How to use the cash runway calculator
- 1Enter the cash you have available today, across all business bank accounts.
- 2Enter your current monthly revenue and monthly expenses. Use cash actually received and paid, not invoices raised.
- 3Optionally enter how fast you expect revenue and expenses to grow each month. Leave both at 0 for a flat forecast.
- 4Read your net burn, the number of months your cash lasts and the month it runs out.
- 5Check the month-by-month table to see where the cash goes, and try different growth rates to plan hiring or fundraising.
Burn rate and runway
Gross burn is everything you spend in a month. Net burn is what you spend minus what you bring in: the amount your bank balance actually falls each month. Runway is how many months of net burn your cash can cover.
If revenue is higher than expenses, there is no burn. The business is cash-flow positive and the cash balance grows instead of shrinking.
Net burn = Monthly expenses − Monthly revenue Runway (flat) = Cash in bank ÷ Net burn
Why growth changes the answer
The simple division assumes nothing changes. Real businesses grow: revenue rises as you win customers, and expenses rise as you hire and spend more. This calculator simulates each month in turn, growing revenue and expenses by the rates you enter, until the cash balance falls to zero or 60 months have passed.
When revenue grows faster than expenses, the burn shrinks each month and runway stretches. If the lines cross before the cash runs out, the business reaches break-even and stops burning. The calculator also shows how much extra cash you would need to reach that point.
Revenue in month N = Revenue × (1 + Revenue growth %)^(N − 1) Expenses in month N = Expenses × (1 + Expense growth %)^(N − 1) Cash at end of month = Cash at start + Revenue − Expenses
How much runway is enough
Raising money or arranging a loan usually takes several months, so many founders aim to start the process with at least 6 to 9 months of cash left, and to hold 12 to 18 months after a raise. A small business that is not raising money may prefer a reserve of 3 to 6 months of expenses. These are common guidelines rather than rules.
Treat the result as a forecast, not a promise. Late customer payments, annual bills, tax payments and seasonal sales can all move the date. Rerun the numbers every month with your actual figures.
Worked example
A small software company has $250,000 in the bank, brings in $20,000 a month and spends $45,000 a month. Revenue is growing 5% a month and expenses 1% a month.
| Net burn in month 1 | $25,000.00 |
| Runway with no growth | 10.0 months |
| Runway with growth | 11.9 months |
| Cash runs out | Month 12 |
| Month 12 revenue / expenses | $34,206.79 / $50,205.08 |
| Revenue first covers expenses | Month 22 |
| Extra cash needed to reach that point | $81,378.70 |
Growth adds almost two months of runway, but cash still runs out in month 12, ten months before the company would break even. It would need to raise about $81,400 more, or cut costs, to get there.