You have cash.
You’re spending it.
You need to know how long it will last.
You need a cash runway roadmap.
Cash runway. Forecast. Time horizon. Your survival.
This guide shows you how.
Runway calculation. Burn rate. Time remaining. Your planning.
Read this. Calculate runway. Plan accordingly.
Key Takeaways
- Calculate cash runway—use Cash Runway Calculator to see exactly how many months you have left
- Calculate burn rate—understand your monthly cash burn to project runway accurately
- Update regularly—recalculate runway monthly as cash and burn change
- Plan milestones—use runway to time key decisions like fundraising or cost cuts
- Build buffers—aim for more runway than you think you need to handle surprises
Table of Contents
Why Runway Matters
Runway shows time remaining.
What happens without runway visibility:
- Cash runs out unexpectedly
- Decisions are made too late
- Opportunities are missed
- Business fails
What happens with runway visibility:
- Cash needs are anticipated
- Decisions are made proactively
- Opportunities are captured
- Business survives
The reality: Runway enables survival.
Calculating Cash Runway
Calculate cash runway:
Use Cash Runway Calculator
Calculate it:
- Use our Cash Runway Calculator
- Enter current cash balance
- Enter monthly burn rate
- See months remaining
Why it matters: Accurate calculation shows true time horizon.
Understand the Output
What the output shows:
- Months until cash runs out
- Time available for decisions
- Urgency level
- Planning window
Why it matters: Understanding enables planning.
Pro tip: Calculate runway. Use our Cash Runway Calculator for accurate calculation. See our cash flow safety net guide for comprehensive planning.
Calculating Burn Rate
Calculate burn rate accurately:
Monthly Cash Outflow
What to include:
- All operating expenses
- Payroll and benefits
- Rent and utilities
- Marketing and sales
- Other cash expenses
Why it matters: Complete expenses show true burn.
Exclude Non-Cash Items
What to exclude:
- Depreciation
- Amortization
- Non-cash expenses
- Accrued expenses not yet paid
Why it matters: Only cash expenses affect runway.
Track Trends
What trends to track:
- Monthly burn changes
- Seasonal patterns
- Growth-related increases
- Cost reduction impacts
Why it matters: Trends show burn trajectory.
Pro tip: Calculate burn rate. Include all cash expenses, exclude non-cash items, track trends. Use our burn rate guide for detailed calculation.
Updating Regularly
Update runway regularly:
Monthly Updates
What to update monthly:
- Current cash balance
- Actual burn rate
- Projected runway
- Comparison to previous month
Why it matters: Regular updates maintain accuracy.
When Cash Changes
When to recalculate:
- After fundraising
- After major expenses
- After revenue changes
- After cost changes
Why it matters: Timely updates reflect reality.
Track Changes Over Time
What to track:
- Runway trends
- Burn rate trends
- Cash balance trends
- Projection accuracy
Why it matters: Tracking shows patterns.
Pro tip: Update regularly. Monthly updates, recalculate when cash changes, track trends. See our monthly financial review guide for routine.
Planning Milestones
Plan milestones using runway:
Fundraising Timing
When to start fundraising:
- 6-9 months before runway ends
- Based on typical fundraising timelines
- Account for negotiation time
- Build in buffer
Why it matters: Early start prevents crisis.
Cost Reduction Timing
When to cut costs:
- Before runway gets critical
- When burn rate is unsustainable
- When growth isn’t materializing
- When alternatives are exhausted
Why it matters: Early cuts preserve runway.
Revenue Milestones
What revenue milestones to set:
- Break-even target
- Profitability target
- Growth targets
- Cash-positive target
Why it matters: Milestones guide decisions.
Pro tip: Plan milestones. Fundraising timing, cost reduction timing, revenue milestones. Use runway to guide all timing decisions.
Building Buffers
Build buffers into runway:
Conservative Assumptions
What assumptions to use:
- Higher burn rate than expected
- Lower revenue than projected
- Longer fundraising timelines
- Unexpected expenses
Why it matters: Conservative assumptions build safety.
Target Runway Length
What runway to target:
- Minimum 6 months
- Preferably 12+ months
- More for high-growth businesses
- Adjust for risk level
Why it matters: Longer runway provides flexibility.
Multiple Scenarios
What scenarios to model:
- Best case
- Base case
- Worst case
- Plan for worst case
Why it matters: Scenarios show range of outcomes.
Pro tip: Build buffers. Conservative assumptions, target runway length, multiple scenarios. See our cash flow scenario planning guide for comprehensive modeling.
Your Next Steps
Calculate runway. Update regularly. Plan milestones.
This Week:
- Review this guide
- Calculate current cash runway
- Calculate current burn rate
- Set up monthly tracking
This Month:
- Update runway calculation
- Compare to previous month
- Identify any concerns
- Plan next steps
Going Forward:
- Update monthly
- Track trends
- Plan milestones
- Build buffers
Need help? Check out our Cash Runway Calculator for runway calculation, our burn rate guide for burn calculation, our cash flow safety net guide for comprehensive planning, and our cash flow scenario planning guide for scenario modeling.
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FAQs - Frequently Asked Questions About Cash Runway Roadmap: How to Forecast Exactly How Long Your Money Will Last
How do you calculate cash runway and what does it tell you?
Cash runway is calculated by dividing your current cash balance by your monthly burn rate, giving you the number of months before your money runs out.
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The formula is simple: Cash Runway (months) = Current Cash Balance ÷ Monthly Burn Rate. If you have $120,000 in the bank and burn $20,000 per month, your runway is 6 months.
Cash runway tells you your survival timeline—how long you can operate before running out of money. It's the single most important metric for early-stage businesses because it determines your decision-making window for fundraising, cost cuts, or reaching profitability.
Without runway visibility, cash runs out unexpectedly, decisions are made too late, and businesses fail. With visibility, you can anticipate needs, make proactive decisions, capture opportunities, and ensure survival.
What should you include and exclude when calculating your monthly burn rate?
Include all actual cash outflows like payroll, rent, marketing, and operating expenses. Exclude non-cash items like depreciation, amortization, and accrued expenses not yet paid.
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Include every dollar that actually leaves your bank account each month: operating expenses, payroll and benefits, rent and utilities, marketing and sales costs, software subscriptions, insurance, loan payments, and any other cash expenditures.
Exclude non-cash accounting items that appear on your income statement but don't affect your bank balance: depreciation, amortization, stock-based compensation, and expenses that have been accrued but not yet paid in cash.
Also track burn rate trends over time. Monitor monthly changes, seasonal patterns, growth-related increases, and the impact of cost reduction efforts. Burn rate rarely stays constant—understanding its trajectory is crucial for accurate runway forecasting.
How often should you update your cash runway calculation?
Update monthly at minimum, and recalculate immediately after any major event like fundraising, large expenses, or significant revenue changes.
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Monthly updates are the baseline. Each month, enter your actual cash balance and recalculate burn rate based on real spending. Compare to the previous month to see if runway is growing or shrinking.
Recalculate immediately after major events: closing a funding round, losing a large customer, making a significant hire, or any event that materially changes your cash balance or burn rate. These events can shift your runway by months.
Track changes over time to spot patterns. Are you consistently burning more than projected? Is revenue growth shortening or extending your runway? Is your projection accuracy improving? These trends help you make better forecasts and catch problems before they become crises.
When should you start fundraising relative to your remaining cash runway?
Start fundraising 6-9 months before your runway ends to account for the typical fundraising timeline, negotiation time, and unexpected delays.
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The 6-9 month guideline accounts for reality: fundraising for early-stage companies typically takes 3-6 months from first conversations to money in the bank. Starting earlier gives you negotiating leverage because you're not desperate.
Build in buffer for the unexpected: due diligence delays, term sheet negotiations, legal review, and closing logistics all take longer than founders expect. Running out of cash during fundraising destroys your negotiating position and can kill deals.
If your runway is short and fundraising isn't an option, the alternative is cost reduction. Cut costs before runway gets critical—early cuts are strategic, while last-minute cuts are desperate and often damage the business more than they save.
What runway length should businesses target and why?
Target a minimum of 6 months of runway, preferably 12+ months, with more for high-growth businesses that need time to prove their model.
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Six months is the absolute minimum—any less and you're in crisis mode with no time for strategic decision-making. Twelve months gives you breathing room to execute plans, respond to setbacks, and fundraise from a position of strength.
High-growth businesses should target even more runway because they typically have higher burn rates and need time to demonstrate the metrics that attract investors. Running out of cash before proving product-market fit is one of the top reasons startups fail.
Use conservative assumptions when calculating target runway: assume higher burn rate than expected, lower revenue than projected, longer fundraising timelines, and budget for unexpected expenses. Model best case, base case, and worst case scenarios—then plan for the worst case.
How do you model multiple cash runway scenarios to prepare for uncertainty?
Build three scenarios—best case, base case, and worst case—by varying your revenue assumptions and burn rate, then plan your decisions around the worst case.
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Best case uses optimistic but realistic assumptions: revenue grows as projected, burn stays controlled, and no major surprises occur. This shows your upside potential and what's possible if everything goes right.
Base case uses your most likely assumptions: moderate revenue growth, normal burn rate increases, and typical operational variability. This is your planning baseline for month-to-month decisions.
Worst case uses conservative assumptions: revenue falls short, burn rate increases due to unexpected costs, and fundraising takes longer than expected. Always plan your critical decisions—when to fundraise, when to cut costs, when to hire—based on worst case. If you can survive the worst case, you'll thrive in the base case.
Sources & Additional Information
This guide provides general information about cash runway forecasting. Your specific situation may require different considerations.
For cash runway calculation, see our Cash Runway Calculator.
For burn rate calculation, see our Burn Rate Guide.
For cash flow scenario planning, see our Cash Flow Scenario Planning Guide.
Consult with professionals for advice specific to your situation.
