What Is Cash Runway And What Number Is Risky?
Runway is how long you can survive if sales drop, based on fixed outflows and available cash.
Who This Is For
- You do not know how many weeks you can last.
- You make decisions without a safety number.
- You want a simple risk check.
What To Do This Week
- Estimate weekly fixed outflows (payroll, rent, loans).
- Runway = available cash ÷ weekly fixed outflows.
- Set a trigger rule when runway drops.
FAQ
Should I include profit account cash?
Only if you would actually use it. Decide your rule upfront.
What is “risky” runway?
It depends. The key warning is runway declining week after week.
Should I include inventory purchases?
If they are required to operate, yes.
Can I improve runway without more sales?
Yes. Collections and payment terms can shift runway fast.
What tool helps?
A simple runway tracker updated weekly.