Calculate your startup's monthly cash burn and estimated survival time.
Gross Burn Rate:–
Net Burn Rate:–
Estimated Runway:–
Zero Cash Date:–
How to Calculate My Burn Rate
Understanding your burn rate is one of the most critical financial exercises for any startup or small business. It dictates how long you can operate before you run out of cash, known as your "runway." This guide explains the mechanics of burn rate, the difference between gross and net burn, and how to use our calculator to plan your financial future.
What is Burn Rate?
Burn rate is the speed at which a company spends its available capital to finance overhead before generating positive cash flow from operations. It is a negative measure of cash flow, usually quoted in terms of cash spent per month.
Investors and founders use this metric to determine the company's "Runway"—the amount of time the company has before it needs to raise more money or become profitable.
Gross Burn vs. Net Burn
There are two types of burn rate you must understand:
Gross Burn: This is the total amount of money your company spends each month on operating expenses (rent, salaries, servers, marketing) regardless of income. If you spend $50,000 a month, your gross burn is $50,000.
Net Burn: This is the amount of money you are losing each month after accounting for incoming revenue. It is calculated as Operating Expenses – Revenue. If you spend $50,000 but make $20,000, your Net Burn is $30,000.
The Formula
To calculate your runway, you use the Net Burn figure:
Runway (Months) = Current Cash Balance / Net Burn Rate
For example, if you have $500,000 in the bank and your Net Burn is $50,000/month, you have 10 months of runway left. This implies you have 10 months to either become profitable or raise additional venture capital.
Why is Burn Rate Important?
Monitoring your burn rate helps you avoid the "cash cliff." High burn rates are acceptable for high-growth startups funded by venture capital, provided the growth justifies the spend. However, for bootstrapped businesses, keeping the burn rate low is often the key to survival.
How to Extend Your Runway
If the calculator above shows a runway shorter than 6-12 months, you may need to take action:
Cut Costs: Review your gross burn. Are there subscriptions, contractors, or overheads that can be reduced?
Increase Revenue: Focus on sales channels with shorter cycles to bring cash in faster.
Raise Capital: Use your burn rate data to demonstrate to investors how long their investment will sustain the company.
function calculateRunway() {
// Get input values
var cashBalance = parseFloat(document.getElementById('cashBalance').value);
var expenses = parseFloat(document.getElementById('monthlyExpenses').value);
var revenue = parseFloat(document.getElementById('monthlyRevenue').value);
// Validation
if (isNaN(cashBalance) || isNaN(expenses) || isNaN(revenue)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (cashBalance < 0 || expenses < 0 || revenue < 0) {
alert("Values cannot be negative.");
return;
}
// Calculations
var grossBurn = expenses;
var netBurn = expenses – revenue;
var runway = 0;
var dateString = "";
var runwayText = "";
// Determine Runway
if (netBurn <= 0) {
// Company is profitable or breaking even
runwayText = "Infinite (Profitable)";
dateString = "N/A";
} else {
// Company is burning cash
runway = cashBalance / netBurn;
// Format runway to 1 decimal place
runwayText = runway.toFixed(1) + " Months";
// Calculate estimated date
var today = new Date();
var daysToAdd = runway * 30.44; // Average days in a month
var futureDate = new Date(today.getTime() + (daysToAdd * 24 * 60 * 60 * 1000));
var options = { year: 'numeric', month: 'long', day: 'numeric' };
dateString = futureDate.toLocaleDateString('en-US', options);
}
// Display Results
document.getElementById('results-area').style.display = 'block';
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
document.getElementById('resGrossBurn').innerText = formatter.format(grossBurn);
// Handle Net Burn display (show negative if profitable for clarity, or just standard)
// Usually Net Burn is shown as a positive number representing loss.
// If Net Burn is negative (profit), we can show it as + Profit.
if (netBurn < 0) {
document.getElementById('resNetBurn').innerText = "+" + formatter.format(Math.abs(netBurn)) + " (Profit)";
document.getElementById('resNetBurn').style.color = "green";
} else {
document.getElementById('resNetBurn').innerText = formatter.format(netBurn);
document.getElementById('resNetBurn').style.color = "#e74c3c";
}
document.getElementById('resRunway').innerText = runwayText;
document.getElementById('resDate').innerText = dateString;
}