Cash runway: how many weeks can your business keep going?

Start-ups talk about runway all the time. Most small businesses don’t — and they should. Runway answers a simple question that every owner has wondered about at 2am: if sales went quiet tomorrow, how long could we keep going?

The answer isn’t meant to scare you. It’s meant to give you a number you can plan around. Once you know it, decisions about hiring, buying equipment, taking on a big order or arranging funding get a lot clearer.

What exactly is cash runway?

Cash runway is the number of weeks your business could keep paying its normal costs from the cash it has right now, if income slowed to a trickle.

It’s deliberately cautious. Real life usually isn’t that bad — customers keep paying, some costs can be cut. But the cautious number shows how much buffer you really have, and that’s what you need for planning.

How do you calculate it?

Four steps. You’ll need your bank balances, your last few months of statements and your upcoming BAS amount.

Step 1: Start with cash on hand. Add up the balances of all your business accounts today.

Step 2: Subtract what’s already spoken for. Take out:

• GST collected and PAYG withheld that you’ll owe at your next BAS,
• super owed to employees (from 1 July 2026, Payday Super means this is due with each pay run, reaching funds within 7 business days),
• any bills already due or overdue,
• committed payments like a supplier deposit you’ve agreed to.

What’s left is your available cash.

Step 3: Work out your average weekly costs. From your bank statements, add up everything that went out over the last three months — wages, rent, suppliers, loan repayments, insurance, software, utilities — and divide by 13.

Step 4: Divide. Available cash ÷ average weekly costs = runway in weeks.

An illustrative worked example

Illustrative only. A small design studio has three staff.

Item	Amount
Cash across business accounts	$86,000
Less: GST and PAYG withheld for next BAS	−$14,000
Less: super due with this fortnight’s pay	−$2,400
Less: overdue supplier invoice	−$3,600
Available cash	$66,000
Average weekly costs (last 13 weeks)	$11,000
Runway	6 weeks

Six weeks isn’t a crisis, but it’s not a lot of room either — especially for a studio with a couple of large clients who pay on 45-day terms. That’s worth knowing before the owner commits to a fourth hire.

Why isn’t runway enough on its own?

Runway assumes income stops. A 13-week cash forecast adds the income you expect, week by week, to show when your balance will actually be at its lowest. business.gov.au has a template for setting up a cash flow statement that works well for this.

Build it like this:

1. Opening balance (your available cash from step 2).
2. For each of the next 13 weeks, list expected money in — actual receipts you expect, not invoices sent.
3. List expected money out — every wage run, rent payment, BAS, loan repayment and supplier bill.
4. Calculate the closing balance for each week, which becomes the next week’s opening balance.
5. Find the lowest point.

The lowest point is the number that matters. If it dips below zero, you’ve found a gap. If it stays positive but gets uncomfortably close, you’ve found a risk.

Once you can see your gap clearly, a real person can talk you through options — there’s no credit check when you first enquire.

How much runway should you aim for?

There’s no official rule, and anyone who gives you a single number for every business is guessing. It depends on:

• How predictable your income is. A café with daily card takings can plan with less buffer than a builder waiting on progress claims.
• How lumpy your costs are. Quarterly BAS, annual insurance and registration renewals all eat into runway at once.
• How quickly you could cut costs if you had to.
• Your appetite for risk. Some owners sleep better with a big buffer; others prefer to reinvest.

A coaching approach: look at the worst quiet stretch your business has had in the last two years. How many weeks did it last? Aim for enough runway to get through something similar without panic.

What should you do if your runway is short?

Short runway is information, not a verdict. Practical steps, roughly in order of how quickly they help:

1. Chase what’s owed to you. Overdue invoices are cash you’ve already earned.
2. Invoice faster. Bill on completion, not at month end.
3. Pause non-essential spending until the low point has passed.
4. Talk to suppliers. A short extension on terms is often easier to get than people expect — especially if you ask before you’re late.
5. Review pricing. If costs have risen and prices haven’t, runway will keep shrinking.
6. Arrange a buffer before you need it. A line of credit set up while your numbers are healthy is far easier than scrambling during a squeeze.

How does runway help with bigger decisions?

Once you know your runway, you can test decisions against it:

• Hiring: How many weeks does the new hire’s ramp-up take off your runway? Our hiring guide walks through the maths.
• Equipment: Paying cash for a machine might cut your runway from eight weeks to three. Borrowing might keep it at seven.
• A big order: How low does your balance go between paying for materials and getting paid?
• Growth: If growth shortens your runway every month, you’re in the growth squeeze described in our growing stage guide.

How often should you check it?

Monthly is a good habit, and weekly during tight periods. It takes ten minutes once your spreadsheet is set up. Lining it up with your bank reconciliation or your bookkeeper’s monthly close makes it stick.

It’s also worth recalculating whenever something big changes: a major client leaves, you hire, you sign a lease, or your BAS cycle changes.

What does a lender make of your runway?

Lenders don’t usually ask “what’s your runway?” in those words, but they’re looking at the same things: how much cash you keep, how steady your deposits are, and whether a new repayment fits comfortably. An owner who can say “we have about six weeks of runway, our low point is mid-month, and this facility would cover that” makes the conversation quick and productive.

Our business health check covers the other numbers that round out the picture.

A simple runway spreadsheet layout

You don’t need accounting software to track runway. A single sheet with these columns works:

Column	What goes in it
Week starting	The Monday of each week
Opening balance	Last week’s closing balance
Money in	Receipts you genuinely expect that week
Wages and super	Every pay run, including super under Payday Super
Rent and regular bills	Rent, utilities, software, insurance
Suppliers	Bills due that week
Tax	BAS, PAYG instalments, any ATO plan instalment
Loan repayments	Every facility
Closing balance	Opening + money in − everything out

Colour the closing balance red when it drops below your comfort level. Update the actuals each Monday and roll the forecast forward a week. After a month, you’ll find it takes minutes — and it will change how you make decisions.

Know your runway? Let’s make it longer

Calculating your runway is one of the smartest things you can do for your business — and one of the most calming. Whether your number looks healthy or tight, it gives you something to act on.

If a funding buffer would help, the enquiry takes about a minute and there’s no credit check. We don’t hand your details to a mob of lenders; a real person looks at your situation and calls you. Use the numbers from this guide to fill in the form accurately, especially monthly deposits and the size of your gap, so we can match you properly first time.

See if you qualify →