Burn Rate

Burn rate is how much cash your business consumes each month. Gross burn is everything you spend; net burn is spend minus the cash revenue you bring in. Net burn is the number that matters, because it tells you the real speed at which your bank balance is falling.

Burn rate is the engine behind runway. Halve your burn and you double the time you have to figure things out, which is why it is the first lever most founders pull when money gets tight. But burn is not automatically bad: spending to acquire customers who pay back quickly is investment, while spending on overhead that produces nothing is waste. The skill is knowing which is which.

A few concrete ways this plays out. Say you're doing your monthly books in Moneybird: your gross burn is just the sum of money out, and your net burn is that minus the invoices that actually got paid this month, so reconciling the bank feed is what makes the number real rather than a guess. Say you want to watch burn without re-opening a spreadsheet every week, you can pipe the figures into a live Databox board that shows net burn and runway side by side and flags the month they cross a line. And say you're deciding whether a cost is investment or dead weight, paying for Lemlist to run outreach that books paying calls is productive burn; an unused seat nobody logs into is the dead weight to cut first.

Track burn monthly, separate the productive spend from the dead weight, and you keep control of the one resource a lean business cannot manufacture more of overnight, time.