A monthly business review is 30 minutes on the first working day of the month. You write down five numbers (cash, net burn, runway date, MRR and your largest customer's share), explain every change since last month in one line, and leave with one decision that has a date on it. Below is one month done in full, then the blank version to copy.
The point is to find out early which way the company is heading. Paul Graham wrote that half the founders he talks to do not know whether they are default alive or default dead (Default Alive or Default Dead?, 2015). A monthly review is the cheapest way to never be in that half.
The company
A seed-stage B2B software company with seven people. It plans to start its next fundraise in March, and the founders assume a round takes them about four months from first meeting to money in the bank. It is 1 October.
Minutes 0 to 10: the five numbers
| Number | 1 September | 1 October | Change |
|---|---|---|---|
| Cash in bank | €412,000 | €371,500 | -€40,500 |
| Net burn, three-month average | €34,200 | €37,900 | +€3,700 |
| Runway | 12.0 months | 9.8 months | -2.2 months |
| Zero-cash month | early September next year | late July next year | about six weeks earlier |
| MRR | €21,400 | €22,300 | +€900 |
| Largest customer's share of MRR | 23.8% | 26.9% | +3.1 points |
Net burn is a three-month average because single months are noisy: one annual invoice can make a normal month look alarming. Runway is written as a month because "late July" gets a reaction that "9.8 months" does not. The runway guide covers how to turn one into the other.
Notice the runway line. One calendar month passed, and the zero-cash date moved six weeks closer, so the company lost 2.2 months of runway in one month. That is the number the rest of the review has to explain.
Minutes 10 to 20: what moved and why
Every change gets one line. If a line reads "not sure", finding out is homework for this week.
- Cash down €40,500. Normal operations cost €34,500. The other €6,000 was the annual renewal for the design tools, which nobody had on the calendar. It is on the calendar now.
- Burn average up €3,700. September was the first full month of the engineer who started in mid-August. Planned.
- MRR up €900. Two new customers added €1,000, the largest account added seats worth €900, and one customer cancelled (€1,000, moved to a competitor on price).
- Largest customer's share up 3.1 points. Their expansion plus a small customer leaving. Still under 30%, but it has risen for three months running, so it goes on next month's watch list. The concentration guide covers when it becomes a problem.
Now compare the runway date with the next milestone. Last month, starting the raise in March meant closing around July, two months before the old zero-cash date. This month the zero-cash date is late July, so a March start closes the round the month the money runs out.
The item that is not in the numbers yet
Last week the founders signed an offer with a designer who starts on 1 November at €5,500 a month, all-in. None of that is in September's burn, so none of it is in the table.
net burn with the designer = 37,900 + 5,500 = €43,400 runway = 371,500 / 43,400 = 8.6 months zero-cash month = mid-June next year
Counting the designer from today is slightly pessimistic, since he starts in November, but not by enough to change the answer: with the hire included, a March start closes the round about a month after the cash is gone. This is the step most reviews skip: anything signed, promised or decided but not yet paid has to be added before you read the runway, or next month's numbers will surprise you with something you already knew.
Minutes 20 to 30: one decision
The options on the table were to delay the designer, cut other spending, or start fundraising earlier. The founders chose one:
Move the fundraise start from March to January. The CEO books the first investor meetings for the week of 12 January.
With a January start and their four-month assumption, the round closes around mid-May: about a month before the mid-June zero-cash date with the designer, and over two months before late July without. The designer stays. If January slips, delaying the hire is the first item for the November review.
One decision a month sounds small. Over a year it is twelve corrections, each made while it was still cheap to make.
The blank version
Copy this into a running document, one section per month.
| Number | Last month | This month | Change | Why |
|---|---|---|---|---|
| Cash in bank | ||||
| Net burn, three-month average | ||||
| Zero-cash month | ||||
| MRR | ||||
| Largest customer's share |
Then answer three questions in writing:
- What moved, and do I know why? One line per change.
- Where is the zero-cash month against the next milestone (fundraise, launch, break-even)?
- What have I signed, promised or decided that is not in these numbers yet? Add it and recalculate.
End with one decision: what, who, and by when.
Keeping it going
Book it as a recurring 30-minute meeting on the first working day of each month and treat it like an investor meeting. Keep every month in the same document. After a year you have a plain record of what happened to the company and why, and most of an investor update is already written each month.
The usual failure is spending the 30 minutes collecting numbers instead of reading them. If that happens, fix the collection. In Plainhub, cash, net burn, runway, MRR and your largest customer's share are current whenever you open it, because they recalculate as you record what happens. A signed hire like the designer can go in as a draft plan, which shows the runway with it before it affects your real numbers. On the Max plan you can also export the PDF report (cash, burn, MRR, ARR, spending, revenue, team and a twelve-month cash projection) and file it with that month's notes.