WELCOME TO ISSUE NO #054

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📆 Today’s Rundown

Hey 👋, hope you had a great week! I bet you missed me, but I was so busy cooking something that you’re going to love. Stay tuned for more info! 👀

In the last issue, we discussed why having Expense Dashboard matter, and now we are moving with the next topic from Cash Flow & Expenses content.

Let’s talk about ⬇️

Net Burn

Most founders have no clue how fast they're actually burning through cash.

(If this is you, don’t worry—I won’t tell anyone.)

But here’s the kicker: Knowing your net burn rate could literally be the difference between skyrocketing growth and painful bankruptcy.

Today, I’m going to explain exactly what "net burn" is, why it’s vital for your SaaS startup, and how you can use it to keep investors smiling (instead of sweating).

Ready? Let’s dive in. 👇

TL;DR

🔥 What the Heck is Burn Rate?

✈️ How to Calculate Your Runway?

📈 Benchmarking Your Runway—How Much Is Enough?

🚨 Avoiding Net Burn Pitfalls (Don’t Let This Be You!)

🚀 4 Practical Ways to Lower Your Net Burn Rate

🔥 First, What the Heck is Burn Rate?

Burn rate is exactly what it sounds like—the speed your startup is burning through cash. It's the monthly measure of your cash disappearing act.

There are two main types:

• Gross Burn (The Big Spender):
  Total cash flowing out monthly, ignoring any revenue.
  Think rent, salaries, software subscriptions—basically, your startup's monthly credit card bill.

• Net Burn (The Honest Truth):
  Gross burn minus your monthly revenue.
  This shows exactly how much you're losing each month after you make sales.

👉 Quick Example:
If your monthly costs (Gross Burn) are $10,000, but you're bringing in $4,000 monthly, your Net Burn is $6,000. Simple enough, right?

Why You Should Care About Net Burn (Hint: Survival)

And here’s why investors love this number:

• It clearly shows how efficiently you're managing growth.

• It helps you predict when you’ll need more money (hint: fundraising).

• It signals if your business model is sustainable or if it’s just fancy window dressing.

✈️ How to Calculate Your Runway (aka: How Long You’ve Got Left)

The term "runway" isn’t just for airplanes—it tells you exactly how many months you have before your startup crashes if no new money comes in.

Here’s the formula (no calculator anxiety, I promise):

Example:

You have $1,000,000 in the bank and your net burn is $50,000/month.

👉 Your runway is $1,000,000 ÷ $50,000 = 20 months.

The longer your runway, the more breathing room you have to grow strategically (or raise more funding).

Need clarity on your financial strategy or cash flow optimization?

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

📈 Benchmarking Your Runway—How Much Is Enough?

Here's a pro tip: Most experts recommend having at least 18 months of runway.

Why 18 months? Because that's typically how long it takes between funding rounds. If your runway is shorter, investors get nervous. Nervous investors = harder fundraising rounds.

Bottom line: Aim for 18+ months if you want to sleep at night.

🚨 Avoiding Net Burn Pitfalls (Don’t Let This Be You!)

Tracking net burn is powerful—but it’s also easy to get wrong.

Watch out for these pitfalls:

• Ignoring monthly variations: Your revenue changes every month—don’t pretend it doesn’t.

• Not categorizing costs: Know exactly what’s driving your expenses. Is marketing eating too much? Or is it your cloud hosting bill?

• Getting obsessed with growth: Growth is great, but if it's insanely expensive, you could be burning cash faster than a crypto investor in 2022.

🚀 4 Practical Ways to Lower Your Net Burn Rate

Here’s your action plan—because knowledge without action is worthless:

1️⃣ Categorize & Control Your Expenses
Break down costs monthly. Spot spending trends early and tackle unnecessary expenses.

2️⃣ Prioritize Ruthlessly
In startup land, trying to do everything means achieving nothing.
Focus your money on high-impact projects that move the needle for customers (and investors).

3️⃣ Keep Fixed Costs Low
Avoid long-term commitments early on. Rent, don’t buy. Contractors instead of full-time hires. Flexibility = longer runway.

4️⃣ Love Your Existing Customers
Acquiring new customers is expensive. Keeping existing customers happy costs less and brings in steady revenue. Measure retention, churn, and MRR religiously.

🎯 Your Burn Rate Takeaway

Remember, losing money early is normal—but losing money blindly is dangerous. Keep your burn rate visible, manageable, and under control.

Want personalized help figuring out your net burn?

Just hit reply—I’m always here to help founders navigate the chaos of startup finance (and maybe swap a funny startup horror story or two).

Here’s to smarter spending and better cash flow,

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