How to calculate your startup runway — the honest way

Runway is cash divided by burn. The lie is almost always in the burn.

The formula, properly

Runway (months) = cash available ÷ net monthly burn, where net burn = fixed costs + variable costs − gross profit (not revenue). Founders flatter themselves twice: counting revenue instead of margin, and forgetting the costs that arrive quarterly — insurance, subscriptions billed annually, tax set-asides. List every cost you've paid in 90 days, divide by three: that's your real fixed base.

State your assumptions or the number is fiction

A runway figure without its assumptions is a mood, not a plan. Write beside each number where it came from: "compute cost NZ$0.20/unit (last month's bill ÷ units)". When reality moves, you'll know which assumption broke instead of just feeling poorer.

The number that actually matters: the full-time trigger

For side-project founders the question isn't "when do I die" but "when can I commit". That's monthly gross profit ≥ your minimum personal cost of living + the business's fixed base, sustained for three consecutive months. Calculate it once and pin it above your desk.