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Finance · business glossary

What is Runway?

By Shivam Bhandari · Reviewed 31 October 2026 · How we write

definition

How many months a business can keep operating at its current burn rate before running out of cash.

Runway explained

Runway is the number of months a business can keep operating before it runs out of cash, if spending and income stay the same.

formula

Runway (months) = Cash available ÷ Monthly net burn

example

₹54 lakh in the bank and a net burn of ₹9 lakh a month gives a runway of 6 months.

why it matters

It sets the deadline for fixing losses or raising money. Start fundraising well before runway gets short.

common mistake

Counting money customers owe you as if it were already in the bank.

Calculate your runway →

Frequently asked questions

What is Runway?

How many months a business can keep operating at its current burn rate before running out of cash. Runway is the number of months a business can keep operating before it runs out of cash, if spending and income stay the same.

How do you calculate Runway?

Runway (months) = Cash available ÷ Monthly net burn. ₹54 lakh in the bank and a net burn of ₹9 lakh a month gives a runway of 6 months.

Why does Runway matter?

It sets the deadline for fixing losses or raising money. Start fundraising well before runway gets short.

What is a common mistake with Runway?

Counting money customers owe you as if it were already in the bank.

Related terms

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