Help, My Business Is Running Out Of Cash

Imagine your business is a plane. You’ve taken off, the engines are running, but how far can you go before you need to land and refuel? That’s your cash runway, the amount of time your business can operate before your bank account hits zero. It’s a simple concept, but it’s one of the most powerful tools for founders. Knowing your runway helps you make smart, timely decisions about spending, hiring, fundraising, and growth. Without it, you risk waking up one day and realising you’ve run out of money and options.

In this article, we’ll break down what cash runway actually means, how to calculate it, and three key things you must know to keep your business not only alive but thriving. Whether you’re bootstrapped or backed by investors, mastering your runway is essential to long-term success. Let’s make sure your business stays in the air.

1. What Exactly is Cash Runway?

Cash runway is the number of months your business can keep operating with the money you currently have, assuming your income and expenses stay the same. For example, if you have £60,000 in the bank and your monthly net burn (expenses minus income) is £10,000, your runway is 6 months. It’s an important part of understanding your cashflow because it’s the ultimate reality check. It tells you how much breathing room you have to grow, make changes, or raise more funds before hitting a wall. But here’s the thing, your runway isn’t static. If sales spike or you cut costs, it extends. If expenses grow or revenue dips, it shortens. That’s why tracking it regularly is crucial.

Founder tip: Build your runway into your monthly dashboard alongside revenue and expenses, so you never lose sight of it.

2. How to Calculate It (and Track It)

The simplest formula for cash runway is:

Cash on Hand ÷ Monthly Net Burn = Runway (in months)

But in practice, you’ll want to get more detailed: Account for seasonal sales patterns (Christmas, Summer holidays), Factor in committed but not-yet-paid expenses (New tools or staff), Adjust for upcoming revenue changes (e.g., new cusomers or contracts coming soon).

Tracking runway is most useful when done monthly ideally as part of a rolling 90-day cashflow forecast. This way, you’re not only seeing how long you can survive now, but also projecting where you’ll be in 3, 6, or 12 months.

Founder tip: Use a visual dashboard. A simple colour code (green = safe, yellow = caution, red = urgent) makes it much easier to spot risks at a glance. Get the Clever FInance Club Cash Runway Calculator

3. Three Things You Need to Know to Keep Your Business Growing

A. Short Runway Means Immediate Action Is Needed

If your runway is under 6 months, you need to either reduce burn by increasing revenue, decreasing costs, or securing funding. Avoid panic moves and plan strategically.

B. Growth Can Shorten Your Runway

Scaling too quickly without a buffer is one of the biggest causes of startup collapse. Even “good” growth eats cash upfront, so model the impact before making big hires or investments.

C. Fundraising Timelines Are Longer Than You Think

If you plan to raise capital, start 9–12 months before your runway ends. Deals take time, and running out of cash mid-negotiation is a deal killer. Running out of cash before you receive more funds is a business killer.

Founder tip: Aim for at least 12 months of runway if you’re in a high-growth phase. It gives you space to take calculated risks without constant cash pressure.

Your cash runway isn’t just a finance metric, it’s your business’s lifeline. It tells you how much time you have to experiment, grow, and adapt before you need more fuel. By tracking it monthly, understanding how it shifts with your revenue and expenses, and planning ahead for growth, you can make confident, proactive decisions instead of scrambling in crisis mode. The truth is, most business failures aren’t caused by a bad product or lack of demand, they’re caused by running out of cash. But with a clear view of your runway, you can avoid this.

Get the Clever Finance Club Cash Runway Calculator to understand your cashflow position, calculate your runway, and use it as your early warning system.

It’s one of the simplest, most powerful tools in your founder toolkit and it could be the difference between being stuck and flourishing.