Entrepreneurs build longer runways

entrepreneur runway

If startups are like planes then cash is runway. More cash = more runway.

The secret to starting a business is having enough cash so that your plane can take-off before you run out of runway, and so that your plane can stay in the air…

There are three factors that affect your runway:

  1. Savings

Simple. The more cash in the bank, the more runway you have.

  1. Overheads

No matter how much savings you have, if your overheads are high your runway will get shorter.

  1. Revenue

If you can generate revenue you can lower your monthly burn-rate (burn = expenses – revenue), and extend your runway.

If you’re an entrepreneur you’re constantly trying to extend your runway. That means maximising the pile of cash at the start, being fanatically frugal, and selling selling selling.

If you’re not thinking about runway, you soon will be.


Also published on Medium.