How many months of cash does your business actually have?
Runway is the one number that turns money stress into a plan: how many months you survive if revenue stopped tomorrow. It will not stop tomorrow. Compute it anyway.
Runway = cash on hand ÷ monthly burn. Burn is every dollar that leaves in a month: rent, payroll, subscriptions, supplies, loan payments, your own draw. The honest version uses your highest recent burn month, not your best one, because runway built on your cheapest month is a story, not a plan.
The four demo businesses
| Demo business | Cash | Burn | Runway |
|---|---|---|---|
| Ember & Oak (a full-service restaurant) | $22,800 | $6,000/mo | 3.8 mo |
| GreenLine Yards (a landscaping crew) | $31,500 | $5,700/mo | 5.5 mo |
| Kiln & Co. (a ceramics studio selling online) | $48,300 | $6,900/mo | 7.0 mo |
| The Wren Sessions (a working musician) | $9,400 | $2,250/mo | 4.2 mo |
The restaurant is at 3.8 months. That is not an emergency, but it is under the four-month line where a watchlist should be lit: one slow season plus one surprise repair and choices start being made for you. The ceramics studio at 7 months can think in seasons instead of weeks.
Why four months is the line
Not magic, just arithmetic: most small-business shocks (a slow season, an equipment failure, a late-paying anchor client) take one to two months to hit fully and one to two months to fix. Four months means a shock and its repair fit inside your cash without borrowing at the worst possible moment.
What to do when runway is thin
- Under 3 months: act this week. Chase every late invoice, pause every subscription you cannot name the value of, and move your draw to the worst-month floor.
- 3 to 4 months: watch weekly. No new fixed costs. Anything that turns inventory or receivables into cash moves first.
- Over 6 months: your risk flips. The question stops being survival and becomes whether idle cash should be working: equipment, inventory for the season, or a hire you have rehearsed.
The runway calculator does this with your numbers, including the thin-months warning.
Common questions
Should my own pay count in the burn?
Yes. Runway that only works because you stopped paying yourself is not runway, it is a countdown with extra steps.
Is more runway always better?
No. Past six months or so, cash sitting idle has a cost too. The point of the number is to know which side of the line you are on, so the rest of your decisions have a floor under them.
Connect Square, Stripe, Shopify, Etsy, QuickBooks, or your bank. Every answer carries a receipt: the method, the sample size, and the confidence. When the math is not conclusive, it says so.
Get Counsel on the App Store Try the web demoCounsel's rule, applied to its own content: every figure above is computed, sourced from our demo businesses or your own inputs, never invented. This is cash math, not tax or legal advice. Written and maintained by the founder.