Cash runway calculator

Cash runway is the simplest question a business can ask itself: if nothing else came in, how long could it keep going? Divide the cash sitting in the bank by what leaves each month — wages, van finance, insurance, rent, subscriptions, the lot — and you get a number of months. It's not a prediction of what will happen, because more money almost always comes in. It's a floor: the worst-case cover you're working with right now, today, if the taps stopped.

Why this number matters more than profit

A trades business can be profitable on paper and still run out of cash, because profit and cash arrive at different speeds. Materials get paid for up front, wages go out weekly, and customers can take thirty, sixty or ninety days to settle an invoice. Runway strips all of that away and asks one blunt question: how many months does the bank balance actually buy you. It's the number that matters on the Tuesday a big customer pays late.

A worked example

Say there's £15,000 in the business account and outgoings run at £4,000 a month — wages, the van, insurance, software, rent on the yard. That's 3.75 months of runway if not a single invoice got paid from today. It sounds tight, and it is: most businesses carry far less cover than they think, because the number only feels real once it's written down against what actually goes out each month.

Runway tells you how long. It doesn't tell you why.

Short runway is a symptom, not a diagnosis. Often the real problem isn't a lack of work — it's the gap between when a job gets done and when the invoice actually clears, especially on commercial contracts with long payment terms. If that gap is what's squeezing the bank balance, the cash gap calculator shows exactly where the shortfall is coming from — payment terms against when your own bills fall due — rather than just how much cover you're left with.

What this isn't

This tool assumes outgoings stay flat every month, which they rarely do — a VAT bill, an MOT, or a slow month for materials can spike things well above the average. It also ignores every penny still owed to you: outstanding invoices, deposits due, and work already on the books all extend real runway beyond what this number shows. Treat it as the pessimistic floor, not the full picture — a starting point for asking whether the buffer is thick enough, not the final word on it.