How to actually work out your runway

Runway is the single most useful number you can know about your business, and most people never work it out properly. Put plainly: your runway is how many months of cash you have left before you run out, if nothing changes. That is it. Not a forecast, not a fundraising story — just how long you can keep going at your current rate.

It matters because it turns a vague worry ("are we okay?") into a number you can act on. Six months of runway and a hire to make is a very different decision than eighteen months. Knowing the number is what lets you make the call calmly instead of in a panic.

The simple math

There are only two inputs, and you already have both.

• Cash on hand — every account you could actually spend from today: your business bank balance, plus anything else liquid.
• Net monthly burn — what you spend in a typical month, minus what you bring in. If you spend more than you earn, this is a positive number, and it is the one that eats your cash.

Runway is one divided by the other:

runway (months) = cash on hand ÷ net monthly burn

If you have $60,000 in the bank and you burn a net $10,000 a month, you have six months of runway. If you start earning $4,000 a month, your net burn drops to $6,000 and the same cash now lasts ten months. Earning more and spending less both move the same number — which is exactly why it is the number worth watching.

People and rent, not your tool subscriptions

When people first add up their costs, they tend to reach for the small, visible, recurring charges — the software subscriptions, the domain renewals, the bits that land in your inbox with a receipt. Those are easy to see, so they feel like "the costs". They almost never are.

The numbers that actually decide your runway are the big, boring ones: salaries and contractor payments, rent, taxes, and anything else that leaves a large hole in the account every month. Cutting three SaaS tools you forgot you were paying for feels productive, but it might save you $80. One month of one salary dwarfs it.

If you want to change your runway, look at the biggest line first. It is almost always a person or a place — not a piece of software.

This is also why "we will just trim some subscriptions" is rarely a real plan. The honest version is harder: it usually means a hiring decision, a smaller office, or earning more. Knowing your real burn is what forces that honesty.

Why the spreadsheet drifts

Most people work their runway out once, in a spreadsheet, and feel good about it for a week. Then a contractor invoice changes, a client pays late, a new cost starts, and the number on the sheet quietly becomes fiction. The spreadsheet was never wrong — it was just frozen at a moment that has passed.

The drift is silent, which is the dangerous part. A stale runway number does not warn you it is stale. You glance at it, see "nine months", and relax — when the real figure has slipped to five. By the time you notice, you have lost the months you most needed to react in.

Keeping it accurate by hand means re-entering the same numbers every week forever. Almost nobody does that, because it is tedious and there is always something more urgent. So the sheet drifts, and the number you trust most becomes the number you should trust least.

What "computed live" means

The fix is to stop treating runway as a number you calculate and start treating it as a number that falls out of your real money. If your cash balances and your costs already live in one place, your runway is just cash divided by net burn — worked out fresh every time you look, from the actual figures, with no re-typing.

That is what computing it live means: a contractor invoice lands and your runway updates; a retainer starts paying and your runway updates; you give yourself a raise and your runway updates. You are never looking at last month's answer. You are looking at the truth as of right now.

CentralHq does exactly this. You keep your cash, your money in and out, and your costs in one place, and it computes your runway live from those real numbers — people and rent included, not just the easy subscriptions. See how it works on the runway page, or start free and watch your own number appear.