For any startup, cash is the same as oxygen, without it, survival is impossible. If you poorly manage your startup’s expenses, costs, and budget, the business can quickly end into failure.
That’s why we built a Startup Runway Calculator — it answers the most critical question every entrepreneur asksL "How long can we operate before we run out of cash?"
In this guide, we cover:
A Startup Runway Calculator is a financial tool that is used to calculate how much time remains before your startup runs out of cash, based on your monthly expenses. It provides valuable insights that warn you early and help you make data-backed decisions to avoid going bankrupt.
It helps with:
Our Startup Runway Calculator is simple and requires just two inputs:
50,000 dollars5,000 dollarsCalculator computes the value and instantly displays the result:
10 monthsAs you fill in the required values, the calculator instantly displays the result below in real time, showing when your startup will run out of cash.
Behind the scenes, the logic is clear and simple, divide the total cash you have for your startup by the monthly burn rate. Here is the formula:
Runway (months) = Cash on Hand / Monthly Burn Rate
Formula breakdown:
Imagine you’ve started a small restaurant with a total startup budget of 70,000 dollars, and your business is spending 7,000 dollars per month. Let's compute the values:
70,000 dollars7,000 dollarsApply the formula:
Runway (months) = 70,000/ 7,000 = 10 monthsThat means your restaurant will run out of cash after 10 months.
A common rule of thumb is that a startup should have 12 to 18 months of runway cash reserved, especially in the early stages. This helps to cover unexpected delays, fundraising time, or other setbacks:
Example:
2 million dollars150,000 dollars2,000,000 / 150,000 = 13 months🛡️ Buffer Time:
6 months3 months9 months🎯 Effective Runway Needed:
18 months💰 Cash Required:
2.7 million dollarsSo ideally, you should have 2.7 million dollars in the bank to operate safely and confidently.