What Is Cash Runway (And Why It Matters More Than Profit)
Cash runway tells you one thing:
How long your business can survive at its current spending level.
"How many months do I have if nothing changes?"
A profitable business with a short runway is still at risk.
An unprofitable business with a long runway has time to fix things.
Runway is time — and time is safety.
The Formula
Example:
$60,000 cash ÷ $15,000 per month = 4 months of runway
That means you have four months to adjust, improve, or turn things around if revenue stopped tomorrow.
What the Numbers Mean
Why Runway Matters More Than Profit
Profit tells you if your business model works.
Runway tells you if you'll survive long enough to prove it.
Plenty of profitable businesses die because customers pay late.
Plenty of unprofitable startups survive because they had enough runway to pivot.
Runway buys time. Time buys options.
How to Extend Your Runway
- Collect cash faster (follow up on receivables)
- Delay non-essential spending
- Cut or pause fixed costs
- Renegotiate payment terms with suppliers
- Increase prices if the market allows
Every dollar saved or collected adds days to your runway.
The Real Lesson
Growth without runway is gambling.
Runway without growth is slow death.
You need both.
But if you must choose — choose runway.
See Your Cash Runway Calculated Automatically
PlainFinancials calculates your runway from your actual numbers and warns you when it gets tight.
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