Project Burn Rate Calculator
Calculate how many months your remaining budget will last at the current monthly spending rate. Use it to track project or startup runway and decide when to cut costs, raise more money, or accelerate revenue.
About this calculator
Burn rate is the speed at which a project or company is spending its cash reserves; runway is how long that cash will last at the current burn. The formula is: Runway (months) = Remaining Budget / Monthly Expenses. Variables: Monthly Expenses (your "burn") is the average net cash leaving the business each month — for a project, salaries, contractors, tools, and overhead; for a startup, all operating costs minus any revenue collected. Remaining Budget is the cash you have left to spend. A simple way to compute net burn from financial statements: Net Burn = Cash at Start of Month − Cash at End of Month (averaged over 3–6 months to smooth out lumpy items). Edge cases: zero monthly expenses gives an undefined or infinite runway (mathematically not useful — you are not actually a going concern at zero spend); a positive net cash flow (revenue exceeds expenses) means there is no burn and you have indefinite runway. Burn rate is meaningful only when consistent: a single month's figure can be distorted by a quarterly tax payment, an annual insurance premium, or a one-off asset purchase, so trailing 3-month or trailing 6-month averages are standard. The metric is structurally about cash, not profit — depreciation and amortisation should be excluded because they do not consume cash.
How to use
Example 1 — Software project tracking runway. The project has $90,000 left in the budget and is averaging $15,000/month in spending (developer salaries + cloud bills + tools). Enter 15000 and 90000. Step 1: 90,000 / 15,000 = 6 months runway. Verify: in 6 months, 6 × $15,000 = $90,000 spent ✓. If the project needs another 9 months to deliver, the gap is 3 months × $15,000 = $45,000 — either raise an additional $45k or cut monthly spend to ~$10k (e.g., release one contractor) to stretch to 9 months. Example 2 — Early-stage startup runway check. Cash in bank: $720,000. Monthly net burn (after collecting some revenue): $48,000. Enter 48000 and 720000. Step 1: 720,000 / 48,000 = 15 months. The conventional rule is to fundraise when runway hits 9–12 months because fundraising itself takes 3–6 months and you do not want to be at zero when negotiating. With 15 months you have ~3 months of breathing room before that clock starts.
Frequently asked questions
What is the difference between gross burn and net burn?
Gross burn is total monthly operating expenses — every dollar leaving the business each month. Net burn is gross burn minus monthly revenue collected, representing the actual cash drain after any income partially offsets spending. A startup with $50k in monthly expenses and $20k in monthly revenue has $50k gross burn and $30k net burn. Net burn is the right number for runway calculations because that is what actually drains the cash balance. Investors typically ask for both: gross burn shows the scale of operations and signals how much absolute cost discipline matters, while net burn shows how close the business is to break-even and whether the revenue ramp is meaningfully reducing the runway clock.
How much runway should a startup keep before raising the next round?
The conventional benchmark is 9–12 months of runway when you start the next fundraise, because fundraising itself routinely takes 3–6 months from first pitch to wired money, and you do not want to negotiate from a position of weakness. Y Combinator and most institutional VCs advise founders to begin pitching when they have 12 months left; below 6 months the leverage flips entirely to investors. In tight capital markets (post-2022, for example) extend the cushion to 18+ months because deal cycles lengthen and term sheets get re-traded more aggressively. Calculating runway monthly and presenting it transparently to your board is standard hygiene; surprises here destroy trust faster than missing growth targets.
What are the most common mistakes when calculating burn rate?
The biggest is using a single month's spend instead of a trailing 3- or 6-month average; one-off items (annual insurance, quarterly taxes, year-end bonuses, equipment purchases) make any single month unrepresentative. The second is conflating gross and net burn, leading to runway numbers that are either too pessimistic (using gross when revenue is meaningful) or too optimistic (assuming revenue at gross-burn scale when it has not actually materialised). The third is treating accrual expenses as cash expenses — depreciation, amortisation, and stock-based compensation reduce reported losses but do not consume cash, so they should be excluded from burn. The fourth is assuming flat burn when hiring is planned: every new hire is $8–15k+ per month in fully-loaded cost, and the burn line should step up as the offer letters go out. Finally, founders often forget that fundraising itself burns cash (legal fees, time spent), which is rarely modelled.
When should I NOT use a simple burn-rate / runway calculation?
Avoid simple runway math when the burn rate is changing rapidly — if you are planning to double headcount in three months, today's $50k burn becomes $90k burn, and the linear formula understates how fast cash will actually run out. Build a month-by-month cash forecast instead. Skip it for businesses with strong working-capital swings (collections lag invoicing by 60–90 days, large inventory builds before peak season) — the simple model does not capture the cash impact of growth. Do not use it for businesses with significant non-operating cash flows: scheduled debt repayments, lease commitments coming due, or one-time receivables (insurance settlements, R&D credits). And do not present runway as a static number to a board: present it as a range across scenarios (current trajectory, hiring plan executed, downside revenue case) so the audience sees the sensitivity to assumptions.
How does burn rate relate to operating cash flow and free cash flow?
Burn rate is simply negative operating cash flow viewed from the cash-balance perspective. If your operating cash flow is −$20k/month, your burn rate is $20k/month. Free cash flow (operating cash flow minus CapEx) is the more conservative version: a business with $0 operating cash flow but $10k/month in CapEx still has a $10k burn. For startups, FCF and net burn are usually equivalent because CapEx is small. For project burn, the equivalent is the monthly draw against a fixed budget — the project version of "cash flow" is just budget consumption. All three concepts answer the same fundamental question: how fast is cash leaving the entity, and how long until it runs out? Track all of them at the same monthly cadence and reconcile them; if they diverge, you have an accounting issue worth investigating.