How the runway calculator works (and what it assumes)

A runway calculation starts with two numbers: your cash on hand and your net burn. “Cash on hand” is the money you can actually use to pay bills today (typically your bank balance minus any cash you can’t touch). “Net burn” is how much cash you lose per month, after revenue comes in. If you are spending $20,000 per month and bringing in $12,000 per month, your net burn is $8,000 per month.

The simplest runway formula is: Runway (months) = Cash on hand ÷ Net burn. That’s it. This is why runway is so popular: it compresses the business into one concrete number. But the simplicity can hide important nuance. Cash often moves unevenly: payroll might hit every two weeks, invoices might get paid late, and one‑time expenses (insurance, annual tools, taxes) can create “cash cliffs”. That’s why this calculator includes an optional one‑time expense input and (optionally) growth assumptions for revenue and expenses.

We compute Net burn as: Net burn = Monthly expenses − Monthly revenue. If net burn is positive, you’re losing money each month and runway is finite. If net burn is exactly zero, you are break-even — your runway doesn’t shrink (though you still need a buffer for timing). If net burn is negative, you are profitable, and the concept flips: instead of runway, you’re building a cash cushion each month.

The calculator shows a baseline runway using your current monthly numbers (no growth). This is your “if nothing changes” scenario. It’s the one investors ask for because it is the least opinionated: you are not claiming revenue growth; you are simply stating the truth of your current cash and current burn.

Most businesses don’t stay perfectly flat. Revenue might grow, but costs can also creep. To give a realistic range, the calculator lets you set a monthly revenue growth rate and a monthly expense growth rate. Using those rates, we simulate month‑by‑month cash movement for up to 20 years (240 months) or until cash goes to zero:

• Month 1 uses your starting revenue and expenses.
• Month 2 increases revenue by the revenue growth rate and expenses by the expense growth rate.
• Cash decreases each month by (expenses − revenue). If that difference is negative, cash increases.
• If you added a one‑time expense, we subtract it immediately at the start (a conservative assumption).

The point of the growth sliders is not to “predict” the future — it’s to make assumptions visible. If you set revenue growth to 10% and costs to 0%, runway will look great. If you set revenue growth to 0% and costs to 5%, runway shrinks quickly. That contrast is useful because it turns runway from a scary mystery into a manageable set of levers.

People make faster decisions with a date than a number. So we translate runway months into a runway end date (for example, “Cash runs out around October 2026”). This date is approximate because not all months have the same number of days, and real cash timing matters. Still, it’s extremely helpful for planning: you can count backward and ask, “How many weeks do we have to cut burn, raise, or grow revenue before this date becomes uncomfortable?”

To make the result shareable, we also compute a simple runway risk score from 0–100 where higher is safer. It is based primarily on your baseline runway months, with small adjustments for whether your growth assumptions improve or worsen net burn. Think of it like a dashboard indicator: it’s not accounting, but it’s a fast way to communicate risk.

Three quick examples (with what to do next)

The best way to understand runway is to run a few scenarios. Below are three common patterns you’ll see when you plug in numbers. Try matching your business to the closest example — then use the “target runway” slider to see what needs to change.

Cash = $120,000. Revenue = $8,000/month. Expenses = $28,000/month. Net burn = $20,000/month. Baseline runway = 6 months. This is the classic “raise or cut” scenario. If your next fundraise takes 3–4 months, you are already on a timer. The fastest moves are usually: (1) cut recurring expenses, (2) renegotiate or pause tools/contractors, (3) tighten hiring, and (4) push for paid pilots.

Cash = $35,000. Revenue = $15,000/month. Expenses = $15,000/month. Net burn = $0. On paper, runway is “stable.” In reality, you still need a buffer because money arrives and leaves on different days. If you’re paid on net‑30 but payroll is every two weeks, you can still go negative in the middle of a month. The best next step here is to improve cash timing: collect faster, ask for deposits, or shift billing earlier.

Cash = $60,000. Revenue = $18,000/month. Expenses = $26,000/month. Net burn = $8,000/month. Baseline runway = 7.5 months. If revenue grows 8%/month and expenses grow 2%/month, the burn shrinks over time, and you might cross break-even before cash runs out — meaning runway stretches dramatically. This is why growth assumptions matter: a small improvement in sales efficiency or retention can change the timeline.

• 0–3 months: emergency zone. Reduce burn immediately and seek short-cycle cash (collections, deposits, bridge options).
• 3–6 months: urgent. You have time for a focused plan, but not for slow experiments.
• 6–12 months: workable. You can execute meaningful growth and still have flexibility.
• 12+ months: comfortable. You can invest strategically and negotiate funding from strength.

One last nuance: runway should be paired with cash flow visibility. If your revenue is seasonal, or if expenses spike at certain times (taxes, annual renewals), add those as one‑time expenses and run the scenario again. If your runway is “fine” only when you ignore known cash cliffs, the runway number is lying to you.

How to extend runway (without wrecking the business)

Extending runway is not just “cut everything.” Cutting the wrong things can reduce revenue, which can actually shorten runway. The goal is to change the cash math while protecting the parts of the business that create future cash. A useful way to think about it is: protect revenue engines, reduce low‑ROI spend, and improve cash timing.

• Start with recurring expenses: tools, subscriptions, agencies, contractors, and unused seats.
• Renegotiate: payment terms, annual discounts, temporary pauses, or usage‑based pricing.
• Match payroll to milestones: hiring is a runway decision. Delay new hires until revenue can support them.
• Separate “nice-to-have” from “must-have”: keep costs that directly create or keep paying customers.

• Collect faster: tighten invoices, follow up, shorten net terms, or offer small discounts for early payment.
• Ask for deposits or prepayments: many customers can do this if you make it easy.
• Adjust pricing: a small price lift can have a huge effect if your margins are decent.
• Upsell and retention: reducing churn is often the highest ROI runway extender.

The “Target runway” slider is a planning hack: it forces you to convert a goal (for example, 12 months of runway) into a specific change. If you are short, you generally need one of two things: (A) more cash (raise, loan, prepay) or (B) less net burn (cut costs or grow revenue). In the result, the calculator estimates the monthly burn reduction required to hit your target, or the additional cash required if burn doesn’t change.

• Update monthly: runway changes fast. Track it on the same date each month.
• Use cash, not “profit”: profit includes non‑cash items; runway is about cash survival.
• Add seasonality: if revenue dips in summer, simulate lower revenue for those months.
• Model one‑time shocks: equipment, legal, taxes, or renewals. Add them as one‑time expenses.

If you share the result with a cofounder, team, or investor, include the assumptions. A runway number without assumptions is a story, not a plan. The point is not to look good — it’s to make decisions early enough that you never have to make desperate decisions later.

Frequently Asked Questions

• What’s the difference between “burn rate” and “runway”?

  Burn rate is how much cash you lose per month (net burn). Runway is how long your cash lasts at that burn. Burn is a speed; runway is a time.

• Should I use gross burn or net burn?

  For runway, use net burn (expenses minus revenue) because it directly determines how fast cash declines. Gross burn (expenses alone) is still useful for cost discipline, but it can overstate risk if revenue is meaningful.

• What if my business is profitable?

  If revenue is higher than expenses, you are not “running out” of cash in this model. The calculator will show you as profitable and estimate how fast your cash cushion grows, plus a “break-even buffer” note for timing risk.

• Do the growth sliders predict the future?

  No — they’re for scenario planning. They help you see how sensitive runway is to modest changes in growth or cost creep. Use them to stress‑test your plan, not to impress anyone.

• Why does my runway date look “approximate”?

  Because months vary in length and cash timing matters. Runway dates are best used as a planning anchor: “We need to be break-even or funded well before this month.”

• How often should I recalculate runway?

  Monthly is the standard. Weekly can be useful if runway is tight or if you’re making large changes to expenses.

Use runway as a decision tool, not a comfort blanket

Runway calculators are intentionally simplified. Real cash runway depends on payment timing, taxes, inventory cycles, and the “lumpiness” of revenue. Use this tool to start better conversations and make earlier decisions. For major financial choices, verify with your accounting system or a qualified professional.

• On the same day each month, update cash, revenue, and expenses.
• Track baseline runway and one “planned runway” scenario (your goal plan).
• Decide one concrete action that moves burn or revenue in the next 2 weeks.