How to forecast runway and months of cash on Starch
Runway forecasting is the question every operator eventually has to answer: how many months of cash do you have left, and what would change that number? It sounds simple until you actually try to build a reliable model. Revenue is lumpy. Expenses don't fall neatly into categories. Your bookkeeper closes the month two weeks after it ends. And by the time you've stitched together a spreadsheet from bank exports and QuickBooks reports, the numbers are already stale.
What this workflow looks like in practice varies — the inputs, the cadence, and the decisions you're forecasting toward all shift depending on your business model and how fast things are moving. But the core job is the same: know your current burn rate from actual transactions, know your current cash balance from your actual bank accounts, and have a forward projection that updates when either of those change.
On Starch, you end up with a live dashboard that shows net burn, months of runway, and a 24-month forward projection — all pulling from your real bank balance and actual revenue, not last month's export. You can run side-by-side scenarios to see what happens to runway if hiring slows, revenue grows faster, or you delay a raise. The answer to 'when do I need to raise?' is there when you open your laptop in the morning, not after a Friday afternoon spreadsheet session.
Why it matters
A stale runway number leads to bad timing on fundraising, hiring decisions made on false confidence, and board conversations where you're recalculating mid-meeting. Getting this right means you catch a burn acceleration two months early instead of two weeks late. You go into investor conversations with a number you trust. You make the hire or hold the hire based on what's actually in the bank, not what you think is there.
Common pitfalls
The most common mistakes: using a single recent month to estimate burn rate, when one slow payroll week or a delayed vendor payment can make that month unrepresentative. Conflating accrual accounting figures from QuickBooks with actual cash movement — your P&L and your bank balance tell different stories, and runway lives in the bank balance. Updating the model manually once a month on a fixed schedule rather than whenever a material event happens. And not separating payroll from other operating expenses, which means you can't quickly see what's fixed versus what's cuttable if you need to extend runway fast.
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