Who This Helps
This is for junior analysts helping founders make calm decisions. It’s part of the Founder Finance Basics Mission Pack, which tackles real problems like figuring out your runway number so you can explain it and act on it.
Mini Case
Ben’s revenue is up 20% this quarter, but his cash balance hasn’t budged. He’s getting anxious about when to hire a new marketer. By building a quick runway forecast, you show him he has 5.2 months of cash left at the current burn rate. This hard number shifts the conversation from panic to planning.
Do This Now (5 Steps)
- Grab last month’s bank statement and your current monthly expenses.
- Calculate your net cash burn: Cash out minus cash in.
- Take your current cash balance and divide it by that monthly burn rate.
- That’s your core runway number in months. Write it on a sticky note.
- Create two simple scenarios: What if sales grow by 10%? What if a big expense hits? See how the runway changes. It’s like a financial weather report.
Avoid These Traps
- Don’t mix in future, uncertain revenue. Use only real, historical cash data for the core forecast.
- Avoid getting lost in perfect spreadsheet formulas. A simple napkin math version is better than no version.
- Don’t present the number alone. Always pair it with one clear recommendation, like “delay hiring” or “test one new channel.”
- Skipping the scenario step. It’s the most important part for finding your next priority.
- Using accrual accounting numbers. We’re talking about real cash in the bank.
- Letting perfect data delay you. Start with your best guess for missing line items.
- Forgetting to update it. Re-run this forecast every single month.
- Hiding the number. The whole point is to create a shared truth for the team.
Your Win by Friday
By Friday, you’ll have one clear number—your runway—that tells you exactly where to focus. You’ll stop debating ten ideas and start testing the one that protects your cash. You’ll ship a clean analysis that leads to a calm, confident decision. Go find that bank statement!