AccountantCash-Flow Runway Planner
Estimate how many months your business cash will last under Base, Best, and Worst-Case scenarios.
Planner Inputs
Estimated Runway Length
Cash Balance Projections (12 Months)
Understanding Cash-Flow Runway
Cash flow runway measures the amount of time (usually in months) that a business can continue to operate at its current level of income and spending before running out of cash. For service businesses and freelancers, managing runway represents the difference between business survival and closing doors during market dips.
The Formulas
For each month t, we calculate the ending cash balance:
Variable Costst = Revenuet × Variable Rate (%)
Total Costst = Fixed Overhead + Variable Costst + OneTimeExpenset
Net Cash Flowt = Revenuet − Total Costst
Cash Balancet = Cash Balancet-1 + Net Cash Flowt
If Cash Balancet drops below zero, the index t represents the runway limit in months.
Scenario Definitions
- Base Scenario: Utilizes the exact parameters provided in the sliders.
- Best-Case: Models revenue growth +3% higher than base, and variable costs 5% lower.
- Worst-Case: Models revenue growth -3% lower than base (or negative growth), and variable costs 5% higher.
Worked Example
Assume starting reserves of $20,000, fixed overhead of $4,000, and initial revenue of $3,000 (flat growth, 0% variable cost). This represents a monthly net deficit of $1,000:
Runway = $20,000 / $1,000 = 20 Months
Assumptions & Limitations
This tool assumes linear monthly growth and constant billing collection. It does not account for late invoice payments, varying tax liabilities, seasonal fluctuations, or inflation adjustments.