Gross Burn Rate Calculation

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Gross Burn Rate Calculator

Calculate the total amount of cash your business spends each month on operating expenses.

.calculator-container { border: 1px solid #e0e0e0; padding: 25px; background-color: #f9f9f9; border-radius: 8px; max-width: 600px; margin: 20px auto; font-family: Arial, sans-serif; } .form-group { margin-bottom: 15px; } .form-group label { display: block; margin-bottom: 5px; font-weight: bold; color: #333; } .form-group input { width: 100%; padding: 10px; border: 1px solid #ccc; border-radius: 4px; box-sizing: border-box; /* text-align: right; Remove right align for general inputs, add back if desired for numbers */ } .calc-button { width: 100%; padding: 12px; background-color: #0073aa; color: white; border: none; border-radius: 4px; cursor: pointer; font-size: 16px; font-weight: bold; } .calc-button:hover { background-color: #005a87; } #burnResultWrapper { margin-top: 25px; padding: 20px; background-color: #eef7fc; border-radius: 6px; border-left: 5px solid #0073aa; display: none; } .result-line { font-size: 18px; margin-bottom: 10px; color: #333; } .result-value { font-weight: bold; color: #d9534f; /* Red color indicating cash outflow */ font-size: 24px; } .secondary-result { font-size: 14px; color: #666; }
Estimated Monthly Gross Burn: $0.00
Projected Annual Gross Burn: $0.00
function calculateGrossBurnRate() { // Get input values, defaulting to 0 if empty or invalid var salaries = parseFloat(document.getElementById('monthlySalaries').value) || 0; var rent = parseFloat(document.getElementById('monthlyRent').value) || 0; var software = parseFloat(document.getElementById('monthlySoftware').value) || 0; var marketing = parseFloat(document.getElementById('monthlyMarketing').value) || 0; var misc = parseFloat(document.getElementById('monthlyMisc').value) || 0; // Ensure no negative numbers get into the calculation salaries = Math.max(0, salaries); rent = Math.max(0, rent); software = Math.max(0, software); marketing = Math.max(0, marketing); misc = Math.max(0, misc); // Calculate total monthly gross burn var totalMonthlyBurn = salaries + rent + software + marketing + misc; // Calculate annualized burn for perspective var totalAnnualBurn = totalMonthlyBurn * 12; // Format results as currency strings function formatCurrency(amount) { return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,'); } // Display results document.getElementById('monthlyBurnResult').innerHTML = formatCurrency(totalMonthlyBurn); document.getElementById('annualBurnResult').innerHTML = formatCurrency(totalAnnualBurn); // Show the result container document.getElementById('burnResultWrapper').style.display = "block"; }

Understanding Gross Burn Rate: The Speed of Spending

For startups and growing businesses, understanding cash flow is vital for survival. The Gross Burn Rate is a fundamental metric that tells you exactly how much cash your company is spending on operating expenses each month. Unlike "Net Burn Rate," which factors in incoming revenue, Gross Burn Rate looks solely at cash outflow.

Knowing your gross burn rate is essential for calculating your "runway"—the amount of time your business can survive before it runs out of cash if no new revenue or funding comes in. Investors heavily scrutinize this number to gauge capital efficiency and how quickly you will need another funding round.

How to Calculate Gross Burn Rate

The simplest way to calculate Gross Burn Rate is to sum up all your recurring monthly operating expenses. This gives you a snapshot of your current spending velocity. The main components usually include:

  • Payroll: Salaries, benefits, and payroll taxes for all employees and contractors.
  • Rent & Overhead: Office lease payments, utilities, and physical infrastructure costs.
  • Technology & Software: Server costs (AWS, Azure), SaaS subscriptions (CRM, project management, communication tools).
  • Marketing & Sales: Advertising spend, paid acquisition costs, and agency fees.
  • General & Administrative (G&A): Legal fees, accounting, insurance, and travel expenses.

Example Calculation

Let's imagine a Seed-stage SaaS startup with the following monthly cost structure:

  • Salaries & Payroll: $65,000
  • Office Rent: $4,500
  • Software & Servers: $3,000
  • Marketing Spend: $12,000
  • Miscellaneous: $2,500

By inputting these figures into the calculator above, we determine the total monthly outflow:

$65,000 + $4,500 + $3,000 + $12,000 + $2,500 = $87,000 Monthly Gross Burn Rate.

If this startup has $1,000,000 in the bank, their runway based on gross burn is approximately 11.5 months ($1,000,000 / $87,000). Monitoring this metric helps founders make crucial decisions about hiring, spending, and fundraising timelines.

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