Burn Rate (Entrepreneurial Finances) - Definition, Examples, Advice | Bolder Money

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Definition

Calculating how quickly a business spends its cash reserves. Keeping track helps decide when to cut costs or look for extra funding.

What to consider

Plan for additional funding before funds run out.
Monitor cash flow trends closely.
Reduce expenses if runway is short.

Real world scenarios

A startup estimates that its current funds will last 8 months based on its burn rate.
An entrepreneur calculates runway before planning a new product launch.
A small firm uses cash runway estimates to plan for future fundraising.

Related terms

Entrepreneurial Finances

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