Burn Rate Calculator: Find Yours in 5 Minutes
There's a number running in your business right now while you read this article.
Not revenue. Not profit. It's how much you're spending per month to exist, whether or not you sell, whether or not you have customers.
It's called burn rate. And most owners don't know theirs.
Not "approximately." They genuinely don't know.
The question that's going to bother you
If tomorrow you stopped getting payment from any customer, how many months does your business survive on the cash you have today?
That answer depends on two numbers: how much is in the bank and how much is leaving every month.
The first one most owners know. The second one most owners guess.
And it's exactly that guess that turns a manageable problem into a Monday-morning crisis nobody saw coming.
What burn rate actually is
Burn rate is the speed at which your business consumes cash. It's how much money goes out per month before any leftover.
There are two types, and the confusion between them is expensive:
| Type | What it measures | When to use it | |
|---|---|---|---|
| Gross Burn | Everything that leaves the bank per month, no exception | To know the real size of your operation | |
| Net Burn | What leaves minus what comes in as revenue | To know how much cash you're actually consuming |
A business with $16,000 leaving each month and $13,000 coming in has:
- Gross burn of $16,000
- Net burn of $3,000
Net burn is the number that determines your runway. Gross burn is the number that determines the size of the problem if revenue stops.
Both matter. For different reasons. To understand how runway comes from this math, read Runway: how long can your business survive?.
Why real burn is always higher than the estimate
Here's the mistake that shows up in nearly every business doing this math for the first time.
The owner sits down to calculate burn, lists the expenses they remember, and lands on a number. Then they pull the bank statement and the real number is 20%, 30%, sometimes 40% higher.
Why does this happen?
| What you remember to count | What you forget to count | |
|---|---|---|
| Payroll | Payroll taxes, benefits, vacation accruals | |
| Rent | Utilities, property tax, internet | |
| Main tools | Every small subscription that adds up | |
| Big suppliers | Small recurring suppliers | |
| Tax already paid | Tax accumulating to be paid | |
| Founder salary | ||
| Maintenance, replacement, surprises |
Every item on the right column you're forgetting is inflating your runway in your head and deflating it in reality.
Underestimated burn is the number-one cause of cash surprises. You plan for 8 months and get to 5 without understanding what happened.
How to calculate your burn rate now
No secret. Just discipline.
Pull the last 3 months of bank statements
Categorize every outflow
Sum it all and divide by 3
Subtract average revenue from the same 3 months
Divide available cash by net burn
People: Salaries, payroll taxes, founder salary, benefits.
Space: Rent, utilities, HOA.
Tech: Tools, servers, subscriptions.
Suppliers: Everything you buy to operate.
Marketing: Ads, agency, content production.
Admin: Accountant, legal, insurance.
Taxes: Tax outflows in the period.
Other: Everything else.
What to do with the number that showed up
Now comes the part most people avoid.
| Runway that showed up | What it means | What to do | |
|---|---|---|---|
| Above 18 months | You have time to grow with strategy | Focus on growth, not survival | |
| Between 12 and 18 months | Healthy but not comfortable | Monitor monthly and watch burn | |
| Between 6 and 12 months | Pay attention. Time goes fast | Active plan to cut burn or accelerate revenue | |
| Between 3 and 6 months | Real urgency. Not panic, action | Hard decisions now, before it becomes an emergency | |
| Under 3 months | Survival mode | Everything stops except what generates immediate cash |
No runway is too comfortable to skip monitoring. There's runway you know and runway that blindsides you.
If the number tightened up, How to Extend Runway in 90 Days Without Raising brings 3 practical levers to extend time without raising or diluting.
The trap of burn that grows on its own
There's a phenomenon that happens in every growing business that few people talk about openly.
Burn grows faster than revenue.
You hire because you're growing. Get a bigger office. Subscribe to more tools. Invest in marketing. Each makes sense individually.
But burn climbs in steps and revenue climbs as a slope. There comes a moment when the runway that was 12 months turned into 6 without you making any obvious wrong decision.
Company with $60,000 in cash, monitoring growth but not burn.
| Month | Revenue | Gross Burn | Net Burn | Runway | |---|---|---|---|---| | January | $16,000 | $14,000 | (more in than out) | 30 months | | April | $19,000 | $20,000 | $1,000 | 60 months | | July | $21,000 | $26,000 | $5,000 | 12 months | | October | $22,000 | $31,000 | $9,000 | 6.6 months |
Revenue grew 37% in 9 months. Burn grew 121%. Runway dropped from 30 months to 6.6.
This business didn't make a single catastrophic decision. It just didn't monitor burn while it was growing.
Growing without monitoring burn rate is accelerating without watching the fuel gauge. You only notice it ran out when you've already stopped.
How often to monitor
| Company stage | Ideal frequency | |
|---|---|---|
| Runway above 18 months | Monthly | |
| Runway between 6 and 18 months | Biweekly | |
| Runway below 6 months | Weekly | |
| Active fundraising | Weekly |
Burn rate isn't a number to calculate once a year in planning. It's a vital sign of the business. It needs constant tracking.
And to avoid counting revenue wrong (which inflates net), read MRR: 5 calculation traps almost nobody catches.
18 indicators including burn rate, runway, MRR and growth. Right in your browser, no account.
Calculate My Burn Rate Now →Burn rate isn't a startup problem. It's the reality of any business with fixed costs. The difference is who monitors it and who finds out too late.
Keep reading about KPIs
Gross Burn vs Net Burn: Which One to Use for Runway
Gross burn and net burn are two numbers — and both matter. Using the wrong one for runway distorts cash reality by months.
MRR vs ARR: The Real Difference and When to Use Each
MRR and ARR aren't the same metric viewed from different angles. They serve different functions — and using the wrong one distorts decisions.
SaaS Metrics Guide: The 8 Numbers That Actually Matter
MRR, churn, CAC, LTV, runway, burn rate. The 8 numbers that separate SaaS that survives from SaaS that dies — no fancy formulas, real numerical examples.
Frequently asked questions
What is burn rate?
Burn rate is the speed at which your business consumes cash. It's how much money goes out per month before any leftover. There are two types: gross burn (everything that leaves the cash) and net burn (what leaves minus what comes in as revenue). Net determines runway. Gross shows the real size of the operation.
What's the difference between gross and net burn?
Gross burn is everything that leaves the bank per month, no exception. It shows the size of the operation. Net burn is gross burn minus monthly revenue. It shows how much cash you're actually consuming. A business with $16k leaving and $13k coming in has $16k gross burn and $3k net burn. Both matter, for different reasons.
How do you calculate burn rate in practice?
Pull the last 3 months of bank statements. Categorize every outflow (people, space, tech, suppliers, marketing, admin, taxes, other). Sum it all and divide by 3. That's your gross monthly burn. Subtract the average revenue from those same 3 months for net burn. Divide cash on hand by net burn for real runway.
Why is calculated burn always lower than the real one?
Because most founders forget payroll taxes, vacation accruals, utilities, all the small subscriptions, recurring small suppliers, accumulating taxes, founder salary, and maintenance. Each forgotten item inflates runway in your head and deflates it in reality. Underestimated burn is the number-one cause of cash surprises.
How often should you monitor burn rate?
Depends on runway. Above 18 months, monthly. Between 6 and 18 months, biweekly. Below 6 months or fundraising, weekly. Burn rate isn't an annual planning number. It's a vital sign of the business. Growing without monitoring burn is accelerating without watching the fuel gauge.