Burn Rate Calculator

Burn rate and runway calculator for small businesses and startups

If you have cash in the bank and monthly operating costs, the next question is simple: how long does the cash last? That is runway. This burn rate calculator is designed for owners and operators who need a quick, practical runway estimate to make a near-term decision, like whether you must cut costs now, raise funding, renegotiate payment terms, or accelerate revenue to avoid running out of cash.

The calculator focuses on operating burn, meaning recurring monthly expenses such as salaries, rent, software, contractors, marketing, and general overhead. You can optionally include monthly operating revenue so the tool calculates net burn. Net burn is what matters for runway, because revenue offsets expenses. If you do not know revenue yet, leave it blank and the tool assumes revenue is zero so you can still get a usable conservative estimate.

The main output is runway in months. Runway is calculated from cash on hand, adjusted by any one-time inflow and any minimum cash reserve you want to keep. The calculator then estimates how many months you can cover the net burn before cash hits your reserve. You also get supporting figures like gross burn (your monthly expense level), net burn (expenses minus revenue), and the break-even revenue needed to reach zero net burn. These extra figures help you translate the result into an action plan instead of staring at a single number.

To use it, start with the two inputs most people know: cash on hand and monthly operating expenses. Click calculate to see gross burn and a simple runway estimate. If you also know your typical monthly revenue, add it to get net burn and a more realistic runway. If you are expecting a one-time cash inflow soon, add it as well. Finally, if you want a safety buffer, set a minimum cash reserve. The runway output will then tell you how many months you have before you hit that floor, not absolute zero.

The advanced section is only for cases where steady-state assumptions are clearly wrong. If your expenses are rising each month (for example, hiring plans or increasing ad spend) or your revenue is growing each month, add monthly change percentages. With growth rates included, the calculator simulates month-by-month cash movement to estimate when your cash falls to the reserve target. This makes the runway estimate more credible when the business is changing quickly, but it is still meant to be a planning estimate, not a full financial model.

Assumptions and how to use this calculator

• Monthly expenses and revenue are treated as operating averages, not one-off spikes. Use a realistic average month.
• If monthly revenue is left blank, it is treated as 0, which produces a conservative runway estimate.
• One-time inflow is applied once at the start as a simple timing approximation for “expected soon.”
• Expense and revenue change rates, if used, are applied monthly as a simple percentage growth or decline.
• Runway is measured until your cash reaches the reserve target, not necessarily until the account is literally zero.

Common questions

What is the difference between gross burn and net burn?

Gross burn is how much you spend per month, based on operating expenses. Net burn is gross burn minus operating revenue. Runway is driven by net burn. If you spend 100,000 and earn 70,000, your gross burn is 100,000 but your net burn is 30,000.

What if my net burn is zero or negative?

If net burn is zero, you are at break-even and your runway is effectively unlimited under the same assumptions. If net burn is negative, you are cash-flow positive and you are building cash each month. The calculator will show the monthly surplus instead of a runway countdown.

Should I include debt repayments or owner draws in expenses?

If those outflows are paid from business cash and happen monthly, include them in monthly operating expenses for runway purposes. If repayments are irregular or tied to a specific future date, treat them separately and adjust your cash on hand to reflect the expected outflow.

How do I choose a good reserve target?

A common operational approach is to keep at least one to two months of expenses as a minimum reserve, especially if revenue is volatile. If you have payroll risk, supplier prepayments, or regulatory obligations, your reserve should be higher. Set a reserve that reflects how much cash you need to avoid crisis decisions.

When should I use the monthly growth rate inputs?

Use them only if your expenses or revenue are clearly trending month over month. Examples include a hiring plan that ramps payroll, marketing spend that scales with targets, or a subscription business with predictable growth. If you do not have a stable trend, leave growth rates at 0 and use the simple estimate.

If you want a more accurate runway in practice, the key is input quality. Use recent bank balances for cash, calculate expenses from the last three months of actual payments, and use collected revenue, not invoiced revenue, if timing matters. You should also rerun the calculator after any major decision such as a headcount change, pricing change, or a new contract win. Burn rate and runway are management controls, not one-time calculations.