Burn rate is the rate at which a company is spending its capital to finance overhead before generating positive cash flow from operations. Net burn is the most common metric: Monthly Expenses - Monthly Revenue. It shows how much money the company is losing each month.

What is financial runway?

Runway is how long your company can continue to operate before it runs out of money, assuming your current revenue and expenses remain constant. It's calculated as: Total Cash Balance / Net Burn Rate.

How can a startup improve its runway?

There are two primary ways to extend your runway: 1) Decrease your burn rate by cutting unnecessary expenses, or 2) Increase your cash inflows by boosting sales or securing new funding (e.g., a loan or investment).

Burn Rate & Runway Calculator | CalculatorHari.com

The Startup's Ticking Clock

Imagine your startup's cash balance is a tank of fuel. Every month, you use some of that fuel to pay for salaries, rent, and marketing, while your sales add a little bit back. The **Burn Rate** is how quickly your fuel level is dropping. The **Runway** is how many miles you have left before the tank runs empty.

For a founder or investor, this is one of the most critical metrics. It's not just a number; it's a countdown timer. Knowing your runway tells you exactly how much time you have to become profitable or secure the next round of funding. This calculator turns your key financial numbers into a clear, actionable timeline.

More Tools for Founders

Startup Cost Calculator: Estimate your initial funding needs before you even start burning cash.
Business Loan Calculator: Explore debt financing as an option to extend your runway.
Break-Even Point Calculator: Find the revenue target you need to hit to stop burning cash and become profitable.

Frequently Asked Questions (FAQ)

What is the difference between Net Burn and Gross Burn?

Gross Burn is your total monthly expenses. It's how much cash is going out the door. Net Burn is your monthly expenses minus your monthly revenue. It's the amount of money you are actually losing each month and is the more common metric for calculating runway.

What is a good amount of runway for a startup?

Most investors and advisors recommend that an early-stage startup maintain at least 12 to 18 months of runway. This provides enough time to hit significant milestones and navigate the fundraising process without being under extreme pressure. A runway of less than 6 months is often considered a critical danger zone.

How can I extend my company's runway?

You have two main levers: reduce burn or increase cash. To reduce burn, you can cut non-essential costs, renegotiate contracts, or pause hiring. To increase cash, you can focus on sales and revenue growth, or you can raise additional capital through equity financing or debt.

Burn Rate & Runway Calculator

Net Burn Rate (Monthly)

Cash Zero Date