Enter Burn Rate Inputs
Example Data Table
| Input Item | Example Value | Why It Matters |
|---|---|---|
| Starting Cash | USD 250,000 | Defines how long the team can fund operations. |
| Salaries | USD 60,000 | Usually the largest monthly engineering expense. |
| Cloud and Infrastructure | USD 6,500 | Captures hosting, databases, and monitoring costs. |
| Recurring Revenue | USD 18,000 | Offsets burn and improves runway. |
| Planned Hires | 2 engineers starting in month 4 | Shows hiring impact before decisions are made. |
| Expense Growth | 2% monthly | Reflects scaling, vendor increases, and usage growth. |
Formula Used
Monthlyized One-Time Cost = Upcoming One-Time Costs ÷ Spread Months
Base Operating Expense = Salaries + Contractors + Cloud + Tools + QA/DevOps/Support + Office/Remote Ops + Marketing/Sales + Other Fixed + Monthlyized One-Time Cost
Contingency Reserve = Base Operating Expense × (Contingency % ÷ 100)
Gross Burn = Base Operating Expense + Contingency Reserve
Monthly Inflow = Monthly Recurring Revenue + Other Monthly Income
Net Burn = Gross Burn − Monthly Inflow
Runway (months) = Starting Cash ÷ Net Burn, when Net Burn is positive
Ending Cash = Prior Cash − (Projected Expense − Projected Revenue)
How to Use This Calculator
- Enter your current cash balance to define the starting runway.
- Add all monthly operating costs, especially salaries, contractors, hosting, and tools.
- Include one-time costs and spread them across several months if they affect near-term budgeting.
- Enter recurring revenue and any other monthly income to calculate net burn instead of gross burn.
- Set contingency, hiring plans, and growth assumptions to stress-test future cash needs.
- Choose how many months to project and define a low-cash alert threshold.
- Press the calculate button to show results above the form, charted projections, and a month-by-month cash table.
- Use the CSV and PDF buttons to save the analysis for planning, meetings, or stakeholder reporting.
FAQs
1) What is monthly burn rate in software development?
Monthly burn rate is the amount of cash a software business spends each month. It usually includes payroll, contractors, infrastructure, tools, and other operating costs. Net burn subtracts monthly revenue and income from total expenses.
2) Why track both gross burn and net burn?
Gross burn shows total spending before income offsets. Net burn shows how much cash actually leaves the business after revenue. Tracking both helps teams understand operating scale, pricing progress, and true runway risk.
3) How does hiring affect runway?
New hires increase recurring payroll, taxes, benefits, equipment, and management overhead. Even a small hiring plan can change runway sharply. Modeling hire timing helps founders avoid committing to growth before cash support exists.
4) Should cloud costs be separated from payroll?
Yes. Payroll and infrastructure grow differently. Payroll rises with headcount, while cloud spending often rises with product usage, data volume, or architectural inefficiency. Separate inputs make burn analysis more realistic and easier to optimize.
5) What does the contingency reserve do?
A contingency reserve adds a buffer for unexpected spend such as incident response, compliance work, vendor price increases, or emergency contractor help. It reduces overly optimistic planning and improves budget resilience.
6) When is runway considered risky?
Many teams treat runway below nine months as risky because fundraising, revenue expansion, or cost restructuring can take time. The ideal threshold depends on market conditions, product maturity, and how predictable revenue is.
7) Can profitable teams still use a burn calculator?
Yes. Profitable teams can use it for scenario planning, release budgeting, hiring timing, and infrastructure forecasting. A burn calculator is useful whenever leaders want to test how cash changes under different operating assumptions.
8) Why export results to CSV or PDF?
CSV is ideal for spreadsheet modeling, audits, and finance reviews. PDF is better for board decks, planning meetings, and static reporting. Export options make the calculator easier to share across technical and nontechnical stakeholders.