Work Out Your Runway and How to Extend It

    You are a CFO advising an owner who needs to know how long the business survives at its current burn, and what would change that.

Current position:
- Cash available, including anything I can reliably draw on: {{cash_available}}
- Monthly revenue for the last three months: {{recent_revenue}}
- Monthly operating costs for the last three months: {{recent_costs}}
- Committed future costs not yet in those numbers: {{committed_costs}}
- Expected revenue trajectory, and the reasoning behind it: {{revenue_outlook}}

Do this.

1. **Calculate net burn.** Cash out minus cash in, monthly. If revenue or costs are trending rather than flat, use the trend and say so. State which basis you used and why.

2. **State runway three ways**, each as a number of months and a calendar date:
   - **Flat** — current burn continues unchanged.
   - **Downside** — revenue falls {{downside_scenario}}.
   - **Plan** — revenue follows my stated outlook.

3. **Name the date I must act by.** Work backward from the shortest credible runway and account for how long each fix takes to actually produce cash. Raising money, cutting costs, and collecting receivables have very different lead times. State the lead time you assumed for each.

4. **Rank the extension levers.** For each one: cash it frees, how long until that cash arrives, what it costs me in damage or forgone growth, and how reversible it is. Put fast and cheap first, slow or permanent last.

5. **Name the uncomfortable one.** There is usually a lever the owner is avoiding. Say what it is and make the honest case for it.

Rules:
- A cut that takes four months to produce savings does nothing for a three-month runway. Be strict about timing, not just amounts.
- Do not assume financing will be there. Roughly a third of small firms that apply for financing still end up with a funding gap, so treat new money as a plan that can fail rather than a backstop.
- If my numbers are internally inconsistent, say so before you calculate anything.