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 revenue being up while cash stays flat. You’ll learn to create a clear, actionable number everyone can trust.
Mini Case
Ben’s SaaS company has 6 months of cash left. His team wants to hire two new sales reps, which would burn an extra $15k per month. By building a simple runway forecast, he sees that hiring cuts his runway to just 4 months unless he hits a new growth target. This number makes the trade-off crystal clear.
Do This Now (5 Steps)
- Grab last month’s bank statement and current monthly burn rate.
- List every planned new expense for the next quarter (like a new hire or software tool).
- Add your most realistic new revenue forecast for the same period.
- Calculate: (Current Cash) / (New Monthly Burn - New Monthly Revenue). That’s your runway in months.
- Share this single number and the one biggest assumption behind it with your team. Done.
Avoid These Traps
- Don’t build a 50-line spreadsheet. Start with 5 key lines: cash, core burn, new costs, new revenue, runway.
- Don’t use best-case revenue scenarios. Use the forecast you’d bet your own money on.
- Don’t hide the model. The goal is a shared truth, not a perfect prediction.
- Don’t forget to update it every month. It’s a living document, not a one-time report.
- Don’t let debate focus on the formula. Keep the debate on the assumptions, which is where the real decisions are.
Your Win by Friday
By Friday, you’ll have one number—your actionable runway—that cuts through the noise. You’ll know if you should be focusing on growth, cutting costs, or fundraising. No more stress-testing in the dark. You’ve got this.