How to forecast runway and burn rate (without a finance team)

Most founders can quote their MRR but hesitate when asked their runway. That's backwards: revenue is a scoreboard, runway is a survival clock. The good news is that a useful forecast needs three numbers and a habit, not a finance team.

The three numbers

• Cash on hand: the actual balance across your bank accounts today. Not receivables, not committed revenue. Money in the bank.
• Gross burn: everything that leaves the account in a typical month: payroll, rent, software, contractors, taxes.
• Net burn: gross burn minus the cash that actually arrives in the month. If clients pay you 60 days late, that money isn't in this month's number.

Runway is simply cash on hand divided by average net burn. If you have $180,000 in the bank and burn $30,000 net per month, you have six months. Say it in months, not vibes.

Why the spreadsheet version breaks

Almost everyone starts with a spreadsheet, and almost every spreadsheet dies the same way: it's a snapshot. Salaries change, a client pays late, you sign an annual contract, and your model is quietly wrong until someone spends an evening rebuilding it. Forecasts don't fail because the math is hard; they fail because they go stale.

Forecast in scenarios, not certainties

One forecast is a guess. Three forecasts are a strategy. Keep a base case (current burn, current revenue), a downside case (your biggest client churns, that deal slips a quarter), and an upside case (the two deals in late stage close). The point isn't predicting which happens; it's knowing in advance what you'd do in each.

• Below 6 months of runway in your base case: cuts or fundraising start now, not at month three.
• Hiring decisions: model the hire in the downside case. If it survives there, make the offer.
• Fundraising timing: investors take months. Start when runway hits 9–12 months, not 4.

Make it a habit, not a project

A forecast you update quarterly is fiction most of the year. The fix is to remove the manual steps: connect the forecast to your actual bank balance, your actual invoices and your actual payroll so the numbers move when reality moves. That's how budgeting works in Simplify: bank sync keeps cash and burn current, scenarios sit side by side, and runway updates itself. The founder's job shrinks to the part that matters: deciding what to do about it.

The uncomfortable questions your forecast should answer

• If revenue froze today, what month do we hit zero?
• Which single client, if lost, changes our runway by more than a month?
• What does our burn look like the month after the next two planned hires?
• How much of this month's 'revenue' is actually still unpaid invoices?

If you can answer those four in under a minute, your forecast is doing its job.