Question 1

What is runway?

Accepted Answer

Runway is the number of months your business can continue operating at its current burn rate before running out of cash. It is calculated by dividing available cash by monthly net burn (expenses minus revenue).

Question 2

How do you calculate startup runway?

Accepted Answer

The basic formula is: Cash in Bank / (Monthly Expenses - Monthly Revenue) = Months of Runway. However, this ignores tax obligations, deferred revenue, and committed payroll that reduce your actually available cash.

Question 3

What is True Cash Position?

Accepted Answer

True Cash Position is your bank balance minus upcoming tax obligations, deferred revenue (money collected but not yet earned), and committed payroll. It represents the cash actually available for operations, not just the number in your bank account.

Question 4

Why is my runway shorter than expected?

Accepted Answer

Most runway calculations use bank balance as the starting point. But if you have upcoming tax payments, advance payments from customers you still need to deliver on, or committed payroll beyond your monthly burn, your actual available cash is lower.

Question 5

How do taxes affect runway?

Accepted Answer

Upcoming tax obligations (GST, VAT, advance tax, payroll tax) reduce the cash available for operations. A $74,000 tax payment due next quarter is not discretionary spending you can cut. It directly shortens your true runway.

Question 6

How does deferred revenue impact available cash?

Accepted Answer

If you collected $100,000 in advance payments but have only delivered $60,000 of that work, $40,000 is not truly available cash. You still owe the delivery. True Cash Position accounts for this.

Question 7

What is the difference between runway and cash flow?

Accepted Answer

Runway measures how long your cash lasts. Cash flow measures how much cash moves in and out each period. You can have positive cash flow in a month but still have short runway if your total cash is low relative to ongoing burn.

Question 8

How often should runway be recalculated?

Accepted Answer

Every time a material change happens: a new hire, a lost customer, a funding round, a tax payment. RunwayCal recalculates automatically every time you open Mission Control.

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