Gross burn vs net burn
Gross burn is total monthly cash outflow. Net burn subtracts monthly revenue. Both are useful: gross burn shows spending intensity, while net burn drives runway.
Example
If monthly expenses are $80,000 and monthly revenue is $30,000, net burn is $50,000. With $250,000 in cash, simple runway is 5 months.
Common mistakes
Use cash timing, not just accounting profit. Annual software prepayments, payroll taxes and delayed collections can make monthly burn uneven.
Limitations
One-time expenses, annual prepayments, delayed collections, financing activity and tax payments can make actual cash runway differ from this simple monthly estimate.
Last reviewed: 2026-05-17