What it calculates
Runway is how long a business can keep operating before its cash runs out at the current burn rate.
How it works
Cash after setup ÷ (monthly expenses − monthly revenue).
Formula
Runway (months) = (Cash − Setup costs) ÷ (Expenses − Revenue)
- If revenue ≥ expenses the business is cash-flow positive
How to use it
- Enter cash, setup costs and monthly figures.
- Read the runway and the cash needed for a year.
With ₹20 lakh cash, ₹3 lakh setup, ₹2.5 lakh monthly expenses and ₹1 lakh revenue:
Why it helps
- Shows when you need to raise funds or cut costs.
Limitations
- Flat monthly figures; real revenue and costs vary.
Frequently asked questions
What runway should a startup keep?
There is no single rule; many founders plan fundraising well before the last six months of runway.
Should setup costs include registration fees?
Yes. Include company or LLP registration, GST and other licences, deposits, equipment and initial stock — everything spent once before regular trading.
Sources
Planning estimate only; not financial advice.