Burn rate calculator

Worked example: a seed-stage SaaS company

The calculator opens with this company's numbers. It has €420,000 in the bank, €19,000 of monthly revenue, and this is a normal month of money out:

gross burn = 61,500 a month
net burn   = 61,500 - 19,000
           = 42,500 a month
runway     = 420,000 / 42,500
           = 9.9 months

Revenue already covers 31 percent of spend (19,000 of 61,500), which is why net burn is so much lower than gross burn. The same month also had a €9,000 legal bill for the seed round. It left the bank, so the bank statement shows €70,500 going out. It will not repeat, so it stays out of the burn you project with. Put it in and runway drops to 8.2 months on paper, for no real reason.

How to read the three numbers

• Net burn is the speed at which cash disappears. It is the one to report to investors and the one runway is built on.
• Gross burn is your cost base. It matters when revenue is shaky: if revenue stopped tomorrow, gross burn is the pace you would be burning at. In the example, gross burn alone would give 6.8 months of runway instead of 9.9.
• Runway puts the burn in context. Under 6 months, the calculator adds a warning, because a raise usually takes longer than that.

The trend matters more than any single month. Run the calculator on the last three months and compare: if gross burn went up and net burn did not, revenue is keeping up with spend, which is the healthy version of growth. If net burn keeps rising, check what that extra spend is buying. The burn multiple calculator puts a number on it: net burn divided by net new ARR.

What to do next

If runway is under 12 months, list money out from biggest to smallest and decide what you would stop first. In the example, payroll is 72 percent of gross burn, so no cut to tools or office moves the number much. That is normal for a software company and it means hiring decisions are burn decisions. Then run the cash runway calculator to see which month cash runs out and what a cut or more revenue changes. For the concepts in more depth, read what is burn rate.

Burn rate questions founders ask

How Plainhub keeps burn live

In Plainhub, burn is not something you work out at month end. Gross burn is the sum of your team cost from the People page, your recurring expenses and any plan you have committed to, from the date it starts. Net burn subtracts the monthly revenue of your active customers. Customers you only expect, or have marked at risk, are left out until they are real.

One-off costs work the way the example above recommends: they reduce your cash, but they never count as burn. So a legal bill lowers the balance without making your runway look shorter than your normal month. You record costs in a short form or by typing a sentence like “we spent $4,000 on Meta ads” to the finance agent, which asks you to confirm before anything is saved. There is no bank login and no accounting integration to set up.