Question 1

What is cash runway?

Accepted Answer

Runway is the number of months your business can keep operating before it runs out of cash, assuming your current rate of spending. It equals your cash on hand divided by your net monthly cash burn.

Question 2

What is a healthy cash runway for a small business?

Accepted Answer

Most advisors suggest keeping at least three to six months of operating expenses in reserve. Less than one month is a red flag; six or more months gives you room to invest and absorb surprises.

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