How to calculate startup runway

Divide the cash you hold by your net monthly burn — cash out minus cash in — and the result is your runway in months. That gives you a usable first number, but it assumes every month looks like this one, so a month-by-month projection of your bank balance will give you a materially different and more honest date.

Last reviewed 7 August 2026

The one-line calculation#

Runway is cash divided by burn. Take the cash you can actually access today, work out how much of it disappears in an average month once you have netted off what customers pay you, and divide.

Runway: Cash in the bank ÷ Net monthly burn; Net monthly burn is cash out minus cash in. Use cash you can access — not invoiced revenue, and not an overdraft facility you would rather not draw on.

If you hold £240,000 and lose £40,000 a month net, you have six months. That is the number to quote when someone asks in passing, and it is the right place to start.

Get the inputs right#

Most bad runway numbers come from bad inputs rather than bad arithmetic. Three things to check:

Cash means cash. Money sitting in your bank account, not money you have invoiced. A £90,000 receivable on 60-day terms does not help you make payroll next Friday.
Burn means cash out, not costs. An annual licence paid in January is one month of cash and twelve months of expense. Your profit and loss statement will not tell you which months hurt.
Pick a representative month. One quiet month makes your runway look generous; the month your VAT bill lands makes it look terminal. If you are averaging, average over at least a quarter.

Why the simple number is usually wrong#

Dividing cash by burn assumes the next month, and every month after it, looks exactly like the last one. Businesses do not behave that way. Two people start in March and the cost line steps up permanently. Revenue is seasonal. Corporation tax, insurance renewals and annual subscriptions arrive as lumps rather than smoothly. A large customer moves from 30-day to 60-day terms and a month of income silently shifts into the following quarter.

Project the balance instead#

Lay out the next eighteen months and, for each one, write down what you expect to collect and what you expect to pay — including the lumpy items in the month they actually land. Carry the closing balance forward. The month the balance goes below zero is your real runway, and unlike the division sum it tells you something you can act on: which specific month is the problem.

Once the projection exists, it answers the questions you actually have. What happens to the date if we hire two engineers in March instead of January? If we raise prices 10%? If our largest customer leaves? Each of those is a change to one input, and the date moves in response.

Doing this in bluprnts#

bluprnts builds the projection from the drivers rather than asking you to maintain the spreadsheet. You describe your products and pricing, your headcount, your costs and your financing; the bank balance, the burn rate and the runway date fall out of them. Because each figure traces back to the drivers that produced it, you can see why the date is what it is rather than trusting a formula you wrote eight months ago. Changing a hire date or a price and comparing the result side by side is a scenario, not a new version of the file.

Common questions

How do I know when my business will run out of money?

Divide the cash you have by your net monthly burn — the amount that actually leaves the bank each month after receipts. That gives you your runway in months, and counting forward from today gives you the approximate date. It is a rough answer, because it assumes this month repeats forever.

A proper forecast gives you the real date, because it accounts for the things a simple average cannot: a hire starting in March, an annual insurance bill, a customer paying 60 days late, a VAT payment. In bluprnts the bank balance is projected month by month from those drivers, so the point where it crosses zero is a date on a chart rather than a division sum.

How do I forecast cash flow if I'm not an accountant?

Build the forecast from the things you already know about your business rather than from accounting statements. You know what you sell and for how much, who is on the payroll, what your fixed costs are, and what you expect to sell next quarter. Those are the inputs. The profit and loss, balance sheet and cash flow statement are outputs — they should be calculated for you, not filled in by you.

This is what "driver-based" forecasting means, and it is the approach bluprnts takes. You describe products, people, sales, costs and financing in plain business terms, and the three financial statements, your runway and your breakeven point are derived from them.