Burn Rate Calculator
Measure how quickly cash leaves the business each month after revenue.
Calculator
Use 0 if pre-revenue.
Results
Net burn rate
$17,000.00
Cash leaving each month
Gross burn (expenses)
$25,000.00
What this means
Net burn of this size means cash is shrinking each month. Pair this with runway so you know how long you can operate at this pace.
Copy Summary to paste the write-up. Copy Link for the same numbers every time. No login, no setup—just copy and go.
Burn Rate Summary
Net burn rate = Monthly expenses − Monthly revenue. Positive net burn means you are drawing down cash; zero or negative means you are covering costs.
Explanation
Net burn is the monthly cash shortfall (or surplus if negative).
Gross burn is total monthly spending before subtracting revenue.
Business implication: growth spending only works if runway and milestones still line up—know the burn first.
Step-by-step example
Expenses $25,000/mo, revenue $8,000/mo:
- Net burn: $25,000 − $8,000 = $17,000/mo
- Gross burn: $25,000/mo
Formula
Gross burn = Monthly expenses
Net burn = Monthly expenses − Monthly revenue
Helpful tips
- Separate one-time spends from recurring burn so planning stays honest.
- Pair with Runway Calculator every time cash or spend changes.
FAQ
What is burn rate?
Burn rate is how fast a business spends cash. Gross burn is monthly expenses; net burn is expenses minus revenue—the cash gap you must fund from savings or fundraising.
Which number should I use for runway?
Use net burn when you have revenue. If pre-revenue, net burn equals gross burn. Feed that into the Runway Calculator.
Is negative burn bad?
Negative net burn means surplus (revenue exceeds expenses). That is generally healthy—just still watch receivables and one-time costs.
How accurate is this calculator?
It uses average monthly figures you provide. Seasonal businesses should use a representative month or a rolling average.
Related tools
Key terms
Burn rate
Definition. How fast a business spends cash—usually net monthly cash decrease when expenses exceed cash in.
In simple terms. Startups and early freelancers use burn to understand how aggressive spending is relative to cash on hand. Positive cash generation is the opposite of burn.
Burn rate ≈ monthly cash out − monthly cash in (when out > in)
Example. Spend $12,000 and collect $7,000 in a month → about $5,000 monthly burn.
Common mistake. Calling all expenses “burn” even when revenue covers them, or ignoring one-time cash events.
Related calculators. Burn Rate Calculator, Runway Calculator
Runway
Definition. How many months current cash can fund the business at the current burn rate.
In simple terms. Runway is a planning clock—not a prediction of success. It tells you how long you have to grow revenue, cut costs, or raise funds before cash hits zero.
Runway (months) ≈ cash balance ÷ monthly burn rate
Example. $60,000 cash and $10,000/month burn → about 6 months of runway.
Common mistake. Using an optimistic burn that ignores upcoming known costs, or forgetting taxes and owner draws.
Related calculators. Runway Calculator, Burn Rate Calculator
Cash flow
Definition. The movement of cash in and out of the business over a period—not the same as profit on paper.
In simple terms. You can be profitable and still short on cash if customers pay late or you buy inventory up front. Cash-flow views focus on timing.
Net cash flow = cash in − cash out (for the period)
Example. Invoicing $20,000 but collecting $8,000 while paying $12,000 in bills creates a cash squeeze despite strong sales.
Common mistake. Equating booked revenue with cash in the bank.
Related calculators. Cash Flow Forecast Calculator, Accounts Receivable Days Calculator
Related terms. Accounts receivable days, Burn rate, Runway
Notes & Assumptions
Burn rate is a standard startup and SMB cash-management metric, especially for venture-backed and bootstrapped teams.
Last reviewed: July 2026