Burn Rate Calculator — Know Exactly How Long Your Cash Will Last

Burn rate is the single most important financial metric for any pre-profitable business. It tells you how fast you are spending cash and — combined with your current cash balance — exactly how many months of runway you have before you run out of money. Net burn rate (expenses minus revenue) is the operative number: a business spending $40,000/month that earns $10,000/month has a $30,000 net burn and, with $300,000 in the bank, has exactly 10 months of runway. This calculator computes gross burn, net burn, runway, and the revenue level you need to reach to stop burning cash entirely.

How to use this Monthly Expense & Burn Rate Calculator

1. 1Enter your current cash on hand — the total available bank balance and any immediately accessible reserves.
2. 2Enter your monthly fixed costs: salaries, rent, software subscriptions, insurance, loan payments — any cost that does not change with revenue.
3. 3Enter your monthly variable costs: COGS, contractor fees, advertising spend, usage-based cloud costs — anything tied to output or sales volume.
4. 4Enter your current monthly revenue. Enter 0 if you are pre-revenue.
5. 5The calculator instantly shows your net burn rate, runway in months, gross burn, and the break-even revenue you need to stop burning cash.

How burn rate and runway are calculated

Gross burn is your total monthly spend. Net burn subtracts revenue to show the actual cash depletion per month. Runway divides your cash on hand by net burn to give months remaining.

Burn rate example: $250,000 cash, $35,000 fixed costs, $5,000 variable costs, $10,000 revenue

1. 01Gross burn: $35,000 + $5,000 = $40,000/month.
2. 02Net burn: $40,000 − $10,000 = $30,000/month.
3. 03Runway: $250,000 / $30,000 = 8.3 months.
4. 04Break-even revenue needed: $40,000/month.
5. 05Revenue gap to break-even: $40,000 − $10,000 = −$30,000/month.

What affects your burn rate and runway?

Tips and things to know

• ✓Always present net burn (not gross burn) to investors — gross burn is total spend, but net burn reflects your true cash consumption and what the business actually needs to raise.
• ✓Track burn month-over-month, not as a single static figure. A burn rate that is growing 10% per month will exhaust your runway much faster than the static calculation implies.
• ✓If your runway is under 9 months, start fundraising or pursuing revenue aggressively now. By the time you reach 3 months, your negotiating leverage is essentially gone.
• ✓The fastest way to extend runway without raising money is to reduce fixed costs — typically headcount and office space. Variable cost cuts require volume reduction, which may conflict with growth goals.
• ✓Separate cash reserves for operational expenses and keep at least 3 months of gross burn in a high-yield savings account or money market fund so short-term liquidity is never at risk.

Monthly Expense & Burn Rate Calculator — bottom line

Burn rate is one of the few financial metrics that can be predicted with near-perfect accuracy on a short time horizon, yet it is routinely underestimated because founders mentally apply optimistic revenue projections while treating expenses as a floor. The correct approach is the opposite: model expenses as fixed or growing modestly, treat revenue as uncertain, then solve for how much time you have at current trajectory before you need to make a decision — fundraise, cut costs, or pivot. The most common burn rate mistake is not updating the calculation as conditions change. A burn rate from month 1 of a downturn may not reflect month 4 if variable costs have not yet been adjusted. Update the calculation monthly, not quarterly, when the business is within 9 months of a cash problem. Second mistake: confusing gross and net burn when communicating with investors. Investors care about net burn — the actual cash drain after revenue. Presenting gross burn as "the burn rate" makes the business look weaker than it is; presenting net burn when the investor expects gross creates misaligned expectations. Clarify which number is being discussed in every funding conversation. Third: not starting the fundraising process early enough. A typical seed or Series A takes 3–6 months from first outreach to close. With 8 months of runway, the fundraising process needs to start immediately — not when runway reaches 3 months. At 3 months of runway, negotiating position is materially weaker and the risk of a failed raise becomes serious. Use the Liquidity Runway Calculator for personal-finance cash planning during the business runway period.

Official resources and further reading