1. What is Monthly Burn Rate?

The Monthly Burn Rate represents the amount of money a company loses each month when its operating expenses exceed its revenue. It's a key metric for startups and businesses to understand their cash runway.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Operating Expenses — All monthly business costs (salaries, rent, utilities, etc.)
• Revenue — All income generated during the month

Explanation: Positive values indicate cash burn (expenses > revenue), while negative values indicate profit (revenue > expenses).

3. Importance of Calculating Burn Rate

Details: Understanding burn rate helps businesses determine how long they can operate before needing additional funding or becoming profitable. It's crucial for financial planning and investor communications.

4. Using the Calculator

Tips: Enter all operating expenses and revenue in USD. Be comprehensive in including all business costs for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good burn rate?
A: There's no universal "good" rate - it depends on your business stage and funding. The key is having enough runway to reach your next milestone.

Q2: How is burn rate different from cash flow?
A: Burn rate specifically measures cash outflow when expenses exceed revenue, while cash flow includes all cash movements.

Q3: Should I include one-time expenses?
A: For accurate ongoing burn rate, exclude one-time expenses. However, include them in runway calculations.

Q4: How often should I calculate burn rate?
A: Monthly calculation is standard, but startups might track it weekly or bi-weekly.

Q5: What's the difference between gross and net burn?
A: Gross burn is total operating expenses, while net burn is expenses minus revenue (what this calculator shows).