Runway is the single number that tells you how long your business can keep paying its bills if nothing changes. The math is straightforward: take the cash you have on hand right now and divide it by the average amount of cash you burn through every week.
The number you divide by matters. Use net burn, not gross spend. Net burn is what leaves your bank account after income hits it: rent, payroll, software, vendors, taxes, owner draws, minus whatever came in from customers that week. Gross spend inflates the figure because it ignores the cash that paid for it. If you spent $50,000 last month but collected $42,000 in the same window, your net burn was $8,000 — not $50,000 — and that is the figure that determines whether you can pay next month's rent.
Pick a lookback window long enough to smooth the noise. Eight to thirteen weeks is the standard range. A single week can lie: a customer paid early, a vendor invoice landed late, a one-time legal bill hit. Averaging across two to three months folds those spikes into the baseline so the runway number reflects the actual rhythm of the business rather than a freak week. Shorter windows overreact to volatility; longer ones miss recent shifts in behavior.
Once you have the average, the result tells you two things. It tells you whether the business is self-funding — weeks of runway growing over time, or net burn running negative because you are bringing in more than you spend — and it tells you how much room you have to act if it is not. Twelve to sixteen weeks is a comfortable cushion for most small operators; under eight weeks means you should be running an intervention playbook, not a quarterly planning session.
Watch the trend, not just the snapshot. Runway extended over the last quarter is a very different signal from runway extended last month and shrinking this month. Update the calculation weekly, plot it on a line, and look for the slope. A slope that bends down is the most actionable warning a small business has, because the bank balance has not yet moved but the math already knows what is coming.