What burn rate tells you
Burn rate measures how quickly a business spends cash. Gross burn looks at total cash outflow, while net burn subtracts incoming revenue from outgoing cash.
Why runway depends on burn
Runway is cash balance divided by net burn. If your company has £120,000 in cash and burns £20,000 per month, you have roughly six months of runway.
What to do if burn is too high
Review hiring plans, software costs, paid acquisition, and discretionary spend. The goal is not always to cut everything, but to make sure spending matches growth and funding reality.