How to use runway responsibly
Runway is a planning estimate. It is most useful when expenses and revenue are normalized, one-time items are separated, and committed future expenses are considered.
Example
With $250,000 cash, $80,000 monthly expenses and $30,000 monthly revenue, net monthly burn is $50,000 and runway is 5 months. If you reserve $50,000 as a minimum cash floor, usable cash is $200,000 and runway falls to 4 months.
Common mistakes
Do not ignore committed future costs such as hiring, annual software renewals, debt payments or tax bills. Use conservative revenue assumptions when runway affects hiring or fundraising decisions.
Limitations
This is not a cash-flow forecast. Hiring plans, annual contracts, taxes, delayed receivables, debt service and financing risk can materially change runway.
Last reviewed: 2026-05-17