Know the Figures

Runway & Hiring Plan Calculator

How long the money lasts, and what each new hire costs you in weeks of runway.

Replaces: Paid CFO tooling and $99 founder spreadsheet templates

How to use it

Enter what you hold, what you earn, and who you plan to hire. The model walks forward 24 months, adding hires to payroll as they land, and reports the month the cash runs out — or the month gross profit covers costs, whichever comes first.

Where the number comes from

  • Revenue compounds at the monthly growth rate you set, so month 12 is the starting figure multiplied by (1 + growth) to the eleventh power.
  • Only gross profit — revenue times gross margin — is available to pay costs. Using revenue instead is what makes most runway estimates too optimistic.
  • Payroll starts at today’s figure and rises as hires accumulate, stopping at the month you set. Fractional hiring rates only add whole people.
  • Net burn is total costs minus gross profit. Where gross profit exceeds costs, burn is negative and cash grows.
  • Runway is the first month the closing cash balance goes below zero.

What goes wrong

The part most calculators leave out.

  • Sustained monthly growth is the assumption that breaks. A rate held flat for 24 months implies a company that never has a bad quarter, never loses a large customer and never faces a slow enterprise sales cycle.
  • New hires are modelled as productive from day one. In reality most cost full salary for three to six months before contributing, which pulls the cash-out month earlier than shown.
  • Runway is not the date to start fundraising. Raising typically takes three to six months of full attention, and doing it with under six months of cash weakens your position badly.
  • Gross margin is assumed constant. If you are growing by discounting, or your hosting and support costs scale with usage, real margin falls as revenue rises.
  • Payroll here should be fully loaded. Base salary alone understates the true cost by a quarter or more — see the true cost of an employee calculator.

The hiring plan that spends the road to breakeven

A company holds 2.4m and burns about 180,000 a month — a little over 13 months of runway on a simple division. Revenue is growing 6% a month, which on its own would carry it to breakeven before the cash runs out. It plans to add one person a month at 11,000 fully loaded. By month six payroll is 66,000 a month higher and has outrun the growth in gross profit: instead of falling, burn edges up to about 188,000, and the cash runs out in month 14. Without the hires the same company never runs out. Nothing went wrong; the plan simply spent the growth that would have made the business self-funding.

Questions

Should runway use revenue or gross profit?
Gross profit. If it costs you 22 cents to deliver a dollar of revenue, only 78 cents is available to pay the team. Runway models built on gross revenue routinely overstate by several months.
When should I start raising?
Conventionally, when six to nine months of runway remain, because a raise commonly takes three to six months from first meeting to money in the bank. Running a process below six months means negotiating from a position everyone can see.
Why does the model stop at 24 months?
Because monthly growth assumptions stop being meaningful much beyond that. A forecast that shows five years of compounding growth is describing a spreadsheet, not a business.
Does anything I type get sent anywhere?
No. The whole calculation runs in your browser. Nothing is sent to us or logged, and there is no account to create. Your browser keeps the figures with this tab’s history so that Back and Reload bring them back, and Reset clears them.

Last updated .

Corrections

  • : The worked example now matches what the calculator shows at those figures: a 14-month runway with the hiring plan, and breakeven without it. It said hiring cut runway to about nine months, which the calculator does not show.

Put this calculator on your site

Free to embed, on any site, commercial or not. No sign-up and no tracking script — the calculator runs in your reader’s browser exactly as it does here. All we ask is that you keep the credit line.

HTML

The small script resizes the frame as the reader changes inputs. Drop it if your CMS strips scripts — the calculator still works, it will just stay at a fixed height. The calculator is light by default; on a dark site, end the src with ?theme=dark, or ?theme=auto to follow each reader’s device.

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