Burn Rate vs Runway
Burn Rate (Monthly Cash Burn) and Runway (Months of Survival) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: Burn Rate refers to monthly cash burn, while Runway refers to months of survival — they describe different things even when they show up in the same sentence.
Burn Rate — Monthly Cash Burn
How much cash you lose each month. Burn determines runway more than revenue.
Runway — Months of Survival
Months of survival at current burn rate. Growth without runway = death.
When to use Burn Rate
Reach for "Burn Rate" when the conversation is specifically about monthly cash burn. How much cash you lose each month. Burn determines runway more than revenue.
When to use Runway
Reach for "Runway" when the conversation is specifically about months of survival. Months of survival at current burn rate. Growth without runway = death.
FAQs
What is the difference between Burn Rate and Runway?
Burn Rate stands for Monthly Cash Burn — How much cash you lose each month. Burn determines runway more than revenue. Runway stands for Months of Survival — Months of survival at current burn rate. Growth without runway = death.
Are Burn Rate and Runway the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. Burn Rate = Monthly Cash Burn. Runway = Months of Survival.
When should I use Burn Rate vs Runway?
Use Burn Rate when you're specifically referring to monthly cash burn. Use Runway when the topic is months of survival.