All new models. Save $25 with code STARTNOW

Get Started with the Runway and Cash Budget Tool

An overview of the free Runway and Cash Budget Tool.

The free Runway and Cash Budget Tool is used to build a cost budget and forecast cash and runway. 1 It’s intended to be a simple model with easy inputs for expenses, revenues, and external funding, so that you can get a handle on burn, cash and runway quickly and easily. It is the simplest of the base financial models used for creating financial forecasts, and is a good starting point for idea-stage, pre-seed, and even seed-stage founders, advisors, mentors, or consultants that need to create a cost budget and runway forecast with the simplest structure possible.

How it works

The model has three core sheets:

Get Started

Three simple inputs to set:

  • The currency symbol to use in the model
  • The date to use as the first month in the model
  • The beginning cash balance.

Forecast

The core of the model, containing the inputs for the revenues and costs, and creating a 36 month forecast, summed into quarters and years.

  • The model is a 36 month forecast, that starts with the date set for the first month set on the Get Started sheet. This means if you input July 2019 into the Get Started input, your forecast will start in July 2019, and run for 36 months from there. The calendar year is still used as the year-end, so that 2019 forecast would be a 6 month forecast. If you want to add on more months to create a full three year forecast (plus six months for 2019), then follow the instructions for how to extend the timescale on the models.
  • The model uses the standard colors and formatting to denote inputs and calculations.
  • Revenues. The revenue lines are completely open for you to simply type in forecasted revenues, or to create your own logic and calculations to forecast revenues, and then link them into thees revenues lines. You can create more lines for different revenue streams by adding in rows, and making sure the Total line still sums the rows you added. 2
  • Expenses. The expenses lines have a couple example titles, but you can set the names for the expenses however you want. In Column D you can set a category for the expense, and you can rename those categories in the section directly under the Expenses line. You can add as mahy rows as you wish to add in more expenses, just make sure the Total Operating Expenses line sums the rows you added.
  • This free tool does not delineate between Cost of Goods Sold (COGS) and Selling, General and Administrative (SG&A) costs for accounting purposes, but you may choose to set those as categories if you wish.
  • Cash. The cash section takes the beginning cash balance and looks at the change in cash during the period to calculate the ending cash balance. Note that the model can be used for either cash or accrual accounting methods, noting that if you want to use accrual methods you might need to edit this cash section depending on the full accounting impact of the revenues and costs you enter.
  • Funding. On this sheet you can also input external funding - equity, debt, loans, grants - to model the impact of external funding on cash balances.

Runway

After you’ve input your costs and revenues (which, frankly, is optional) on the Forecast sheet, the Runway sheet will automatically create three charts to help you understand and communicate your costs and runway.

The core reporting features of the model consist of the reports on the Runway sheet:

  • Burn and Runway: a chart that shows net cash burn and cash balance over time, combining revenues, expenses, and any external funding.
  • Summary of Operating Expenses: A summary of the cost budget, using the categories you create on the Forecast tab.
  • Sources & Uses: A summary pie chart that shows how the first fundraise - external financing - you put in the model (optional) is used to pay for the summary operating expenses over a period of time.

What this tool does not do

Compared to the paid base financial models, this free tool offers the same core structure, but does not offer two main features:

  • Consolidated financial statements. Income statement, balance sheet, and statement of cash flows are core features of the Starter and Standard Models
  • Prebuilt revenue forecasts. The default revenue model built into the Standard Financial Model contains extensive business logic to help you forecast your operations, revenues and costs. The free tool is completely open, so you may build in any logic to forecast your revenues and expenses - growth rates, customers, users, employees, etc. - in any way you want, so you can still model revenues, but you will need to build

The rest of the differences between the base financial models are detailed by the comparison grid and overview details here ›


  1. Runway means the number of months you have in terms of being able to cover the expenses of the company given current cash situation and expectations. 

  2. This may not be obvious, but if you are looking for revenue logic, you can also explore the Free Tools to see if one of the revenue methodologies there can help you forecast revenues. And of course, it’s easy to pull one of the free tools into this tool and link the revenues calculated in the other free tool into the Forecast sheet of the Runway and Cash budget. Questions, contact me › 

Was this helpful? Yes / No

Thanks, I appreciate the feedback.