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Burn Rate Calculator

Calculate your startup's net and gross burn rate, cash runway in months, and runway health zone. Includes scenario modeling and cost reduction impact. Free tool for founders and startups.

Last revised 13 September 2026

By Team GlobalCalqulate · About our editorial standards

Financial Data

Current Cash Balance ($)

Total cash available (bank balance + funding raised).

Monthly Revenue ($)

Total monthly income from sales.

Monthly Expenses ($)

Total monthly operating costs.

Calculation Type

Excellent, Caution, Risk, Critical zones.

See how reducing expenses extends runway.

Cost Reduction (%)

Estimated percentage reduction in expenses.

Financial Disclaimer: This result is an educational estimate produced by applying a standard formula to the figures you entered. It is not an offer, a quotation, or financial advice: real costs and returns depend on a provider's pricing, fees and underwriting, and on circumstances this calculator does not collect. Confirm the figures with the provider or a qualified adviser before acting on them. Full disclaimer.

Sources & methodology

Formula:: Gross burn
Reference:: U.S. Small Business Administration (SBA)
Content last updated:: September 2026
Scheduled re-verification:: September 2027

Calculation type: Exact calculation. Figures are taken from U.S. Small Business Administration (SBA) — see sources below.

Your entries stay on this device. This calculator runs entirely in your browser — the figures you type are not sent to us or to anyone else. The page itself uses cookies for analytics and advertising, described in the privacy policy.

Formula & methodology

Formula used

Gross burn

gross burn = monthly expenses

Everything going out each month, regardless of what comes in.

Net burn

net burn = monthly expenses − monthly revenue

The rate at which the cash balance actually falls. A negative net burn means the business is cash-flow positive.

Runway

runway (months) = current cash ÷ net burn

How many months of cash remain at the current net burn. Undefined when net burn is zero or negative, because the cash is not running out.

Variable definitions

Symbol	Meaning	Unit
cash	Current cash. cash and equivalents available today	currency
revenue	Monthly revenue. cash actually collected each month	currency
expenses	Monthly expenses. total cash spent each month	currency

Step-by-step calculation

1. Enter cash on hand
Use the bank balance, not accounts receivable.
2. Enter monthly revenue and expenses
Both on a cash basis, so the runway reflects real cash movement.

Limitations

Assumes revenue and expenses stay flat. Most startups have both moving, so runway is a snapshot rather than a forecast.
Revenue here means cash collected, not invoiced. A business with slow-paying customers will run out of cash sooner than this suggests.
One-off items — a tax bill, an annual renewal, a hardware purchase — are not modelled and can shorten runway sharply.

This page is educational. It applies a standard formula to the figures you enter and shows the arithmetic behind the result. It is an estimate, not an offer, a quotation or financial advice: real costs depend on the provider's pricing, fees and underwriting, and on circumstances this calculator does not collect.

Sources & references

Startup Financial Model guidance — cash burn and runway — U.S. Small Business Administration (SBA)

Help & FAQs

Frequently Asked Questions

Clear answers to common questions to help you use this calculator confidently.

What is the difference between net burn and gross burn?

Tap to view the answer

Gross burn is total monthly operating expenses — all the cash going out. Net burn is gross burn minus monthly revenue — the actual rate your bank balance shrinks. A startup spending $100,000/month with $40,000 in revenue has $100,000 gross burn and $60,000 net burn. Net burn determines your runway.

How much runway should a startup have?

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Most VCs recommend 18-24 months of runway after a funding round. 12-18 months is generally healthy. 6-12 months means you should be actively fundraising. Under 6 months is critical and may require bridge financing. Start fundraising when you have 9-12 months remaining.

How can I reduce my burn rate quickly?

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Quick wins: cut non-essential software subscriptions, renegotiate vendor contracts, reduce paid marketing that isn't converting, pause non-critical hires, and reduce office costs. Headcount reduction has the largest impact but should be a last resort.

What's a healthy burn multiple?

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Burn multiple = Net Burn ÷ Net New ARR (annualized). Under 1x is excellent — you're adding more revenue than you're burning. 1-2x is acceptable for growth-stage startups. Above 2x is concerning — you're spending over $2 for each $1 of new revenue.

Should I track burn rate monthly or quarterly?

Tap to view the answer

Monthly tracking is standard for startups under $10M ARR. Burn rate can shift significantly month to month as you hire, launch campaigns, or sign new customers. Quarterly reviews are sufficient for later-stage companies. Board decks typically show burn rate and runway in every update.

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How to Use This Calculator

Enter Current Cash

Input your total cash balance — bank accounts plus any funding raised.

Enter Monthly Revenue & Expenses

Input your average monthly income and total monthly operating costs (salaries, rent, software, marketing).

Select Calculation Type

Choose net burn (expenses minus revenue), gross burn (total expenses), or both for a complete view.

Review Your Runway

See exactly how many months your cash will last, which health zone you're in, and what cost reductions would do to your timeline.

Understanding Your Results

Gross Burn Rate
Total monthly expenses — how much cash goes out the door each month before accounting for revenue.
Net Burn Rate
Monthly expenses minus monthly revenue — the actual amount your cash balance decreases each month.
Runway
The number of months until your cash runs out, calculated as Current Cash ÷ Net Burn Rate.
Runway Health Zone
Excellent (18+ months), Caution (12-17), Risk (6-11), Critical (<6) — industry-standard benchmarks for startup health.

Key Tips

✓
Most VCs expect 12-18+ months of runway after a funding round.
✓
Re-calculate monthly — burn rate can creep up as headcount and expenses grow.
✓
Net burn matters more than gross burn if you have revenue. Gross burn alone ignores income.
✓
A 10% cost reduction extends a 12-month runway to roughly 13.3 months — small cuts compound.
✓
Use best/worst-case scenarios to plan your fundraising timeline before you enter the Risk zone.

Understanding Burn Rate and Cash Runway

What Is Burn Rate?

Burn rate measures how fast a startup spends its cash reserves. Gross burn is total monthly operating expenses — salaries, rent, software, marketing, everything. Net burn is gross burn minus monthly revenue — the actual rate at which your bank balance is shrinking. A company burning $100,000 gross per month but earning $40,000 in revenue has a net burn of $60,000. Gross burn tells investors how much it costs to run the business; net burn tells you how fast you're running out of money. Most founders and investors track both, but net burn is the number that determines runway.

How Runway Is Calculated

Runway is calculated as Current Cash ÷ Net Burn Rate. If you have $500,000 and burn $25,000 net per month, your runway is 20 months. This assumes revenue and expenses stay constant — which they rarely do in a startup. That's why scenario modeling (best, base, worst case) is essential. The calculator's scenario feature lets you test different assumptions: what if revenue grows 10% per month? What if a key customer churns? The runway number is a snapshot, not a guarantee — update it monthly as your numbers change.

Runway Health Zones and Fundraising Timing

The industry-standard health zones are: Excellent (18+ months — you have time to experiment and grow), Caution (12-17 months — start planning your next fundraise), Risk (6-11 months — fundraising should be your top priority), and Critical (<6 months — immediate action needed, potentially at unfavorable terms). Most VCs recommend starting a fundraise when you have at least 9-12 months of runway remaining, because fundraising typically takes 3-6 months and you don't want to negotiate from a position of desperation.

Practical Ways to Extend Runway

Three levers extend your runway: increase revenue (raise prices, upsell existing customers, launch new products), reduce expenses (cut non-essential subscriptions, renegotiate vendor contracts, reduce office space), or raise additional funding (venture capital, angel investment, bridge rounds, or revenue-based financing). Cost reduction is often the fastest lever — even a 15% cut across non-payroll expenses can buy months of additional runway. The calculator's cost reduction slider shows exactly how much each percentage point of savings extends your timeline.

Limitations of Burn Rate Analysis

Burn rate and runway are backward-looking metrics — they use current or historical numbers, not future projections. They assume constant spending and revenue, which rarely holds in startups. They don't account for one-time expenses (legal fees, equipment purchases), seasonal revenue fluctuations, or fundraising timing risk. A startup with 20 months of runway can still fail if it can't raise its next round or reach profitability before cash runs out. Use this calculator as a dashboard indicator, not a crystal ball. Combine it with detailed financial projections and honest market assessments.

Formulas Used by This Calculator

Gross Burn = Monthly Expenses. Net Burn = Monthly Expenses − Monthly Revenue. Runway (months) = Current Cash ÷ Net Burn (shown as unlimited if net burn is zero or negative — i.e., the company is cash-flow positive). Best/worst case scenarios (when enabled) apply a ±20% revenue and ∓10%/+20% expense adjustment to net burn before recalculating runway. Cost reduction impact (when enabled) recalculates net burn using expenses reduced by the entered percentage.

Common Mistakes When Estimating Burn Rate

Using an annual average instead of recent actuals — expenses shift quickly as a company hires or cuts costs, so the last 1-3 months of real spend is a better input than a stale yearly figure. Forgetting revenue — reporting gross burn as if it were net burn overstates how fast cash is disappearing when there's real revenue coming in. Confusing cash with receivables — runway is driven by cash actually in the bank, not invoices issued but unpaid. Ignoring irregular expenses — quarterly taxes, annual insurance, or one-time equipment purchases don't show up in a simple 'recurring monthly costs' estimate unless you divide them out to a monthly equivalent first.

Formula & methodology

Formula used

Gross burn

gross burn = monthly expenses

Everything going out each month, regardless of what comes in.

Net burn

net burn = monthly expenses − monthly revenue

The rate at which the cash balance actually falls. A negative net burn means the business is cash-flow positive.

Runway

runway (months) = current cash ÷ net burn

How many months of cash remain at the current net burn. Undefined when net burn is zero or negative, because the cash is not running out.

Variable definitions

Symbol	Meaning	Unit
cash	Current cash. cash and equivalents available today	currency
revenue	Monthly revenue. cash actually collected each month	currency
expenses	Monthly expenses. total cash spent each month	currency

Step-by-step calculation

1. Enter cash on hand
Use the bank balance, not accounts receivable.
2. Enter monthly revenue and expenses
Both on a cash basis, so the runway reflects real cash movement.

Limitations

Assumes revenue and expenses stay flat. Most startups have both moving, so runway is a snapshot rather than a forecast.
Revenue here means cash collected, not invoiced. A business with slow-paying customers will run out of cash sooner than this suggests.
One-off items — a tax bill, an annual renewal, a hardware purchase — are not modelled and can shorten runway sharply.

Calculator inputs

Financial Data

Your results

Sources & methodology

Formula & methodology

Formula used

Gross burn

Net burn

Runway

Variable definitions

Step-by-step calculation

Limitations

Sources & references

What is the difference between net burn and gross burn?

How much runway should a startup have?

How can I reduce my burn rate quickly?

What's a healthy burn multiple?

Should I track burn rate monthly or quarterly?

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Calculator inputs

Financial Data

Your results

Sources & methodology

How to Use This Calculator

Example: Startup with $500,000 Cash

Understanding Your Results

Key Tips

Understanding Burn Rate and Cash Runway

What Is Burn Rate?

How Runway Is Calculated

Runway Health Zones and Fundraising Timing

Practical Ways to Extend Runway

Limitations of Burn Rate Analysis

Formulas Used by This Calculator

Common Mistakes When Estimating Burn Rate

Formula & methodology

Formula used

Gross burn

Net burn

Runway

Variable definitions

Step-by-step calculation

Limitations

Sources & references

How to Use This Calculator

Example: Startup with $500,000 Cash

Understanding Your Results

Key Tips

Understanding Burn Rate and Cash Runway

What Is Burn Rate?

How Runway Is Calculated

Runway Health Zones and Fundraising Timing

Practical Ways to Extend Runway

Limitations of Burn Rate Analysis

Formulas Used by This Calculator

Common Mistakes When Estimating Burn Rate