Burn Rate Calculator

Monthly net burn and runway from cash movement and current reserves.

Gross versus net burn

Gross burn is total monthly spend; net burn is spend minus revenue. Net burn is what matters for runway — a company spending 200k while earning 150k burns 50k a month, not 200k.

Runway is the number that runs out

Runway = cash ÷ net burn. At 320,000 cash and 50,000 monthly burn, you have 6.4 months. Most founders should start raising when runway drops below 9–12 months, because a round takes 4–6 months and the terms worsen as the number shrinks.

Reading burn honestly

  • Three-month averages smooth one-off payments
  • Exclude financing inflows — they are not operating cash flow
  • Watch the trend: burn growing faster than revenue is the classic failure pattern
  • Model the effect of one big hire: it compounds monthly

What to cut first

Usually the newest initiatives, not the oldest: they have the least evidence of return. Protect the revenue-generating core and the people who run it.

Frequently Asked Questions

What is a good burn rate?

There is no absolute — it only means something relative to runway and growth rate.

Does revenue reduce burn?

Net burn yes; gross burn no.

When should I raise?

At 9–12 months of runway, before you are forced to.

Assumptions & disclaimer

Results are estimates for planning. Fee schedules, tax brackets and deduction limits change; confirm current figures with the marketplace, the IRS or a qualified accountant before making decisions. Nothing here is financial, tax or legal advice.

Privacy & Your Data

BizCalcTool runs entirely in your browser. The figures you enter are never uploaded, stored or shared — there is no backend to send them to.