1. Count usable cash
Start with cash available to fund operations. Keep restricted money, taxes due, and commitments that cannot be postponed separate. Do not treat unpaid invoices or tentative contracts as cash already received.
Small business guide
How long can my business run if revenue falls?
How long can I keep paying expenses if income falls?
Start with available business cash and subtract dependable monthly revenue from recurring cash outflow. Divide by net burn for a flat estimate, then project monthly balances if costs change. Test a lower-revenue case and choose a checkpoint before cash reaches zero.
2. Find net monthly burn
Subtract dependable monthly revenue from recurring monthly outflow. In the example, $2,800 of outflow less $600 of revenue is $2,200 net burn. With flat costs, $30,000 divided by $2,200 gives about 13.64 months.
3. Test a revenue drop and cost drift
Set revenue to zero for a downside case. Then restore it and change the annual cost-growth assumption. The shipped model keeps income constant within each run, so model delayed or irregular receipts as separate cases rather than claiming it schedules individual cash events.
4. Decide before the cash runs out
Choose a cash balance or months-remaining checkpoint for reducing costs, replacing revenue, or seeking funding. Revisit it whenever commitments or collections change. A modeled depletion date is not a guarantee of future cash availability.
Live model
Change an assumption.
Read the consequence.
Enter your assumptions to see an estimate. Use source view to inspect or change the calculation. Your inputs stay in this browser.
template: runway savings = 30000 in usd monthly_burn = 2800 in usd monthly_income = 600 in usd burn_change_rate = 3%
Inputs
What the model needs
- Starting cash
- The reserve dedicated to the modeled period.
- Monthly burn
- Recurring cash outflow before income offsets.
- Monthly income
- Reliable recurring inflow during the runway.
- Burn change
- Annual growth or reduction in expenses, applied monthly; income stays constant.
Method
Formulas stay visible
net_burn = monthly_burn - monthly_incomesimple_runway = starting_cash / net_burnchanging-burn runway is found by projecting each month until balance ≤ 0The inputs and source use the same model. Open it in Continuum for a document you can keep and revisit.
Worked example
A small studio with $30,000 cash
- $30,000 available cash
- $2,800 monthly outflow
- $600 dependable monthly revenue
- 3% annual expense growth
If revenue falls to zero, rerun the model and set a response checkpoint well before the projected depletion month.
Stress-test it
- Test zero income and delayed income separately.
- Add irregular known expenses in the month they occur.
- Compare flat burn with a realistic upward or downward cost trend.
Use it when
- Planning a sabbatical or job transition
- Monitoring a bootstrapped business
- Deciding how much cost reduction buys meaningful time
Know the boundary
- A monthly average can hide timing problems inside a month.
- Do not count uncertain receivables as cash until you intentionally model their risk.
- Runway is a planning horizon, not a promise that income or costs stay stable.
Questions
Can I count signed but unpaid work as monthly revenue?
Only as an explicit scenario. Keep a lower-revenue case until payment timing is reliable.
Can the calculator schedule individual invoice dates?
No. It uses a recurring monthly income input. Create separate cases for late receipts and examine real cash timing outside this simple model.
Is runway the same as profitability?
No. Runway describes how long cash may last under the inputs. Profitability and the timing of cash receipts are related but different questions.
Keep the reasoning
Turn this example into
your living model.
The full template opens as a local Continuum document. Edit every assumption, explore the result breakdown, and keep the source.
Open the editable model