Product Managers: Turn Questions into Decisions with Runway Forecast

Who This Helps

You're a Product Manager who gets asked tough questions every day. "Should we build this feature?" "Can we afford that hire?" "Is our pricing right?" You need answers, not more meetings. This article is for you if you want to turn those questions into decisions your team can execute.

Mini Case

Meet Sarah, a PM at a growing SaaS company. Revenue was up 20% month over month, but cash was flat. Her CEO asked, "Can we hire two more engineers?" Sarah didn't guess. She used the Founder Finance Basics Mission Pack to build a runway forecast. She found that at current burn, they had 7 months of runway. Adding two engineers would cut that to 5 months. She presented the numbers, and the CEO approved a plan to hire one engineer now and one in 3 months. Decision made.

Do This Now (5 Steps)

1. Grab your last 3 months of cash statements. You need starting cash, revenue, and expenses.
2. Calculate monthly burn. Subtract total expenses from total revenue. If negative, that's your burn rate.
3. Divide current cash by monthly burn. That's your runway in months. For example, $300k cash / $50k burn = 6 months.
4. Add one scenario. What if you hire? What if revenue drops 10%? Run the numbers.
5. Write a one-page summary. Include your runway, the scenario, and your recommendation. Share it with your stakeholders.

Avoid These Traps

• Don't use optimistic revenue. Use your actual average from the last 3 months.
• Don't forget one-time costs. A new hire isn't just salary; include tools, taxes, and onboarding.
• Don't hide bad news. A shorter runway is a signal to act, not a reason to panic.
• Don't skip the scenario. Stakeholders love seeing "what if" numbers. It builds trust.
• Don't overcomplicate it. A simple spreadsheet or even a napkin works. The goal is clarity, not perfection.

Your Win by Friday

By Friday, you'll have a runway forecast you can explain in 30 seconds. You'll know exactly how many months of cash you have, and you'll have a clear answer for your next "Can we afford this?" question. That's one less guess, one more decision. And maybe a little more calm in your week.