How to Use Monthly Burn Rate Calculator
The Monthly Burn Rate Calculator sums itemized expenses across categories (payroll, rent, software, marketing, etc.) to compute gross burn. It subtracts monthly revenue to get net burn, then divides cash on hand by net burn to estimate how many months of runway you have. A category breakdown shows where the money goes.
What It Does
Use the calculator with intent
The Monthly Burn Rate Calculator sums itemized expenses across categories (payroll, rent, software, marketing, etc.) to compute gross burn. It subtracts monthly revenue to get net burn, then divides cash on hand by net burn to estimate how many months of runway you have. A category breakdown shows where the money goes.
Startup founders, CFOs, and financial planners who need to track monthly cash outflow and know exactly when they need to raise again or reach profitability. It is critical for any company spending more than it earns.
Interpreting Results
Runway in months is the most actionable output. Most investors recommend maintaining 12-18 months of runway. The category breakdown reveals your largest cost centers and where cuts would have the biggest impact.
Input Steps
Field by field
- 1
Expense Items
Add each monthly expense with a name, category, and amount. Be thorough: include payroll, rent, software, insurance, marketing, and any recurring costs.
- 2
Cash on Hand
Enter your current cash balance. This is the starting point for runway calculation.
- 3
Monthly Revenue
Enter monthly revenue if applicable. Net burn equals gross burn minus revenue. If you have no revenue yet, leave this at zero.
- 4
Results
Review gross burn, net burn, runway in months, and the category breakdown. If runway is under 6 months, start fundraising or cost-cutting immediately.
Common Scenarios
Use realistic starting points
Pre-revenue startup
Payroll
$40,000/mo
Rent
$5,000/mo
Software
$3,000/mo
Marketing
$7,000/mo
Cash on Hand
$500,000
Monthly Revenue
$0
Runway of about 9 months means you should start fundraising now. Payroll dominates, which is typical for early-stage startups.
Try These Tools
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Startup Runway Calculator
Calculate months of runway from cash, burn rate, and revenue growth assumptions.
Burn Multiple Calculator
Calculate burn multiple (net burn / net new ARR) to gauge capital efficiency and fundraising readiness.
Startup Cost Estimator
Estimate pre-launch costs by category with one-time and recurring breakdown for first-year budget.
FAQ
Questions people ask next
The short answers readers usually want after the first pass.
Sources & References
- Burn Rate — Investopedia
- Default Alive or Default Dead? — Paul Graham
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