Business Runway Calculator
Last updated: April 2026
Runway Details
Total cash available across all business accounts.
£
Average monthly revenue received, not invoiced.
£
All monthly outgoings including payroll, rent, software, and other fixed costs.
£
Expected monthly revenue growth. Leave at 0 for a flat scenario.
%
Expected monthly expense growth. Leave at 0 for flat expenses.
%
One-Off Costs
Add planned expenses such as equipment purchases, tax bills, or recruitment costs.
No one-off costs added.
Planned Funding
Add expected injections such as grants, investment, or confirmed loans.
No planned funding added.
You have approximately
10 months
of runway until April 2027.
Burn Rate
Monthly revenue£20,000
Monthly expenses£25,000
Monthly burn rate£5,000.00
Current cash£50,000
Simple runway without growth or one-offs10.0 months
Cash Balance Chart
Month 1Cash balance over timeMonth 60
Monthly Projection Table
Month-by-month cash movement for the next 60 months.
About this calculator
The Business Runway Calculator estimates how many months a company can operate before cash runs out, using starting cash, monthly burn, revenue, costs, and planned changes. It is useful for founders, finance teams, and small businesses planning hiring, fundraising, cost reductions, or growth spending. Use this expanded guide when you need more than a quick result. It explains the assumptions behind the Business Runway Calculator, the records to gather, and the decisions the estimate can support. It is especially useful for founders, directors, finance leads, and small businesses checking how long cash can last under current and stressed assumptions. The strongest use of the page is scenario comparison: change one input at a time, compare the output, and keep a note of which assumption changed.
Runway calculation method
Runway is calculated by dividing available cash by net monthly burn. If revenue and costs change over time, the calculator projects the balance month by month. The calculator result depends on the quality of the inputs and on the rule set or formula selected in the calculator above. For practical use, treat the output as a structured estimate: start with the core inputs, review the main outputs, then test the decision points that matter most to your situation. Key decisions include when cash could run out, whether hiring or marketing plans are affordable, how much funding or cost reduction is needed.
- net burn = monthly cash outflow - monthly cash inflow
- runway months = cash balance / net burn
- ending cash = starting cash - cumulative net burn
- better estimate = accurate inputs + correct rule set + realistic assumptions
- scenario difference = revised result - original result
How to use the runway calculator
- Enter current cash in the bank.
- Enter monthly fixed costs, variable costs, payroll, and other outflows.
- Enter expected monthly revenue or cash receipts.
- Add planned cost increases, hires, or savings if available.
- Review the estimated cash-out date and test lower-revenue scenarios.
- Gather the main inputs first: cash balance, monthly revenue, payroll and fixed costs.
- Check supporting records such as bank balance and management accounts before relying on a final number.
- Enter one realistic scenario first, using conservative assumptions where the future is uncertain.
- Review the main outputs: net burn, runway months, cash-out date.
- Run at least one alternative scenario so you can see which input changes the answer most.
- Compare the result with company accounts, bank records, and HMRC payment schedules or the relevant contract, bill, statement, or professional document.
- Keep the calculation date and assumptions with your notes so you can revisit the estimate when rates, rules, or circumstances change.
Worked example
Simple monthly burn
Input: Cash GBP120,000 and net burn GBP15,000 per month
Calculation: GBP120,000 / GBP15,000 = 8
Result: Estimated runway is 8 months before cash reaches zero.
Hiring scenario
Input: A company adds GBP6,000 monthly payroll to a GBP18,000 burn rate.
Calculation: New burn becomes GBP24,000 before extra revenue.
Result: A GBP240,000 cash balance falls from about 13.3 months runway to 10 months.
Revenue delay scenario
Input: Expected customer receipts of GBP20,000 arrive one month late.
Calculation: The month is modelled with lower inflow and the same costs.
Result: The cash trough is deeper even if annual revenue is unchanged.
Runway versus profitability
A company can have revenue growth and still have short runway if cash leaves faster than it arrives. Runway is a cash measure, not an accounting profit measure. It should be reviewed with payment timing, debt repayments, VAT, payroll taxes, and committed spend.
What to check before relying on the result
A useful Business Runway Calculator result starts with the same evidence you would use if you were checking the answer manually. The calculator can organise the arithmetic, but it cannot know whether a payslip is final, a bill is estimated, a quote excludes fees, or a personal circumstance has changed since the last statement.
Before making a decision, compare the calculator result with the source document that controls the real outcome. For this topic, that usually means checking company accounts, bank records, and HMRC payment schedules. If there is a difference between the calculator and an official statement, contract, assessment, or professional advice, treat the official document as the stronger source.
- bank balance
- Use this as supporting evidence for the calculation. If it is out of date, estimated, or based on a different period, the calculator output may look precise while still being wrong for the decision.
- management accounts
- Use this as supporting evidence for the calculation. If it is out of date, estimated, or based on a different period, the calculator output may look precise while still being wrong for the decision.
- payroll report
- Use this as supporting evidence for the calculation. If it is out of date, estimated, or based on a different period, the calculator output may look precise while still being wrong for the decision.
- aged receivables
- Use this as supporting evidence for the calculation. If it is out of date, estimated, or based on a different period, the calculator output may look precise while still being wrong for the decision.
- sales forecast
- Use this as supporting evidence for the calculation. If it is out of date, estimated, or based on a different period, the calculator output may look precise while still being wrong for the decision.
Inputs that usually change the answer
The most important input is not always the largest number on the form. Sometimes a date, threshold, percentage, eligibility flag, or timing assumption changes the result more than the headline amount. This is why scenario testing is more useful than a single calculation.
| Input | Why it matters | What to double-check |
|---|---|---|
| cash balance | It feeds directly into the estimate or changes which rule is applied. | Check the period, units, eligibility, and whether the figure is final or estimated. |
| monthly revenue | It feeds directly into the estimate or changes which rule is applied. | Check the period, units, eligibility, and whether the figure is final or estimated. |
| payroll and fixed costs | It feeds directly into the estimate or changes which rule is applied. | Check the period, units, eligibility, and whether the figure is final or estimated. |
| variable costs | It feeds directly into the estimate or changes which rule is applied. | Check the period, units, eligibility, and whether the figure is final or estimated. |
| planned hires or savings | It feeds directly into the estimate or changes which rule is applied. | Check the period, units, eligibility, and whether the figure is final or estimated. |
How to interpret the output
The output should be read as a decision aid, not just a number. For Business Runway Calculator, the useful question is often what the result means for timing, affordability, eligibility, comparison, or next steps.
- net burn
- Use this output alongside the other results rather than in isolation. A monthly amount, percentage, date, or payback figure can look acceptable until fees, timing, evidence, or eligibility conditions are added.
- runway months
- Use this output alongside the other results rather than in isolation. A monthly amount, percentage, date, or payback figure can look acceptable until fees, timing, evidence, or eligibility conditions are added.
- cash-out date
- Use this output alongside the other results rather than in isolation. A monthly amount, percentage, date, or payback figure can look acceptable until fees, timing, evidence, or eligibility conditions are added.
- funding gap under scenarios
- Use this output alongside the other results rather than in isolation. A monthly amount, percentage, date, or payback figure can look acceptable until fees, timing, evidence, or eligibility conditions are added.
Scenarios worth comparing
A single estimate is a snapshot. A better approach is to save a base case, then adjust one assumption at a time. This shows whether the result is stable or whether a small change in timing, rate, usage, income, or cost creates a very different answer.
| Scenario | Change one assumption | What the comparison shows |
|---|---|---|
| Base case | Use the best current evidence. | Shows the result you would expect if nothing important changes. |
| Conservative case | Use lower income, higher cost, slower growth, or less favourable timing. | Shows whether the decision still works with less optimistic assumptions. |
| Improved case | Use the realistic upside, such as lower cost, better rate, higher usage, or stronger evidence. | Shows the potential benefit without treating it as guaranteed. |
Common mistakes and edge cases
Most errors come from using the right formula with the wrong assumption. Dates can be counted differently, rates can change, official thresholds can move, and real bills or contracts often include conditions that a simple calculator cannot infer automatically.
- Profit is not the same as cash.
- Check this point before using the estimate for a payment, claim, purchase, application, employment decision, or health-related decision.
- VAT, PAYE, corporation tax, and loan repayments can create lumpier cash needs.
- Check this point before using the estimate for a payment, claim, purchase, application, employment decision, or health-related decision.
- Late customer payments shorten runway.
- Check this point before using the estimate for a payment, claim, purchase, application, employment decision, or health-related decision.
- One-off costs should be modelled separately.
- Check this point before using the estimate for a payment, claim, purchase, application, employment decision, or health-related decision.
Next steps after calculating
Once you have a result, write down the key assumptions and compare them with company accounts, bank records, and HMRC payment schedules. If the number affects a deadline, tax return, benefit claim, employment issue, medical question, finance agreement, or major purchase, use the calculator as preparation for a more formal check.
For lower-stakes use, the next step may simply be comparing two or three scenarios. For higher-stakes use, the next step should be checking the official guidance, speaking to the relevant organisation, or getting qualified advice before acting.
Important edge cases
- Profit is not the same as cash.
- VAT, PAYE, corporation tax, and loan repayments can create lumpier cash needs.
- Late customer payments shorten runway.
- One-off costs should be modelled separately.
Limitations
This calculator is for planning only and is not financial advice. This is general business planning information and not financial advice. The calculator is designed to support understanding and planning, but it cannot verify documents, predict future rule changes, or account for every exception. Use it as an estimate and check the official source before acting where the result matters.
- It depends on forecast accuracy.
- It does not guarantee funding availability.
- One-off tax bills, late customers, or unexpected costs can shorten runway.
- Check company accounts, bank records, and HMRC payment schedules for current rules, rates, definitions, and eligibility where relevant.
- Do not rely on a single scenario where income, costs, dates, rates, usage, or health circumstances may change.
- Keep records of the inputs used so that the estimate can be reviewed later.
Frequently asked questions
What is a good runway?
It depends on the business, but many founders monitor whether they have enough time to reach the next funding, profitability, or cost decision point.
Should VAT be included?
Yes, cash forecasts should include VAT and tax payments when they affect the bank balance.
Can runway increase without fundraising?
Yes, by reducing burn, improving collections, increasing revenue, or delaying non-essential spend.
Should tax payments be included?
Yes. Any payment that leaves the bank should be included in a cash runway forecast.
How often should runway be reviewed?
Fast-moving businesses often review monthly or even weekly, especially when cash is tight.
What is net burn?
Net burn is cash outflow minus cash inflow over a period, usually a month.
Related calculators
- Cash Flow Gap Calculator
- Working Capital Calculator
- Business Loan Repayment Calculator
- Break-Even Calculator
What is business runway?
Business runway is the number of months a company can continue operating before it runs out of cash, based on its current cash balance and monthly burn rate. It is one of the most important metrics for any SME or startup to track. Most financial advisers recommend maintaining at least 3-6 months of runway at all times.
What is burn rate?
Burn rate is the rate at which a business spends its cash reserves. Net burn rate is the difference between monthly expenses and monthly revenue: the amount by which your cash balance decreases each month. Gross burn rate is total monthly expenses regardless of revenue.
How can I extend my runway?
The most effective ways to extend runway are: increasing revenue or accelerating cash collection, reducing expenses, raising new funding, or using invoice finance to release cash tied up in unpaid invoices. Runway extension should be planned well in advance because most funding processes take longer than expected.
What is a healthy runway for a UK startup?
Most investors and advisers recommend maintaining at least 12-18 months of runway for early-stage startups, and 3-6 months for established SMEs. The right amount depends on your stage, growth rate, and how quickly you could raise additional funding if needed.
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