Burn rate calculator

Use this burn rate calculator to see how long it will take your business to reach profitability. This calculation is key to measuring sustainability and is especially helpful for start-ups when it comes to deciding when, where and how much to invest in your business.

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Our Burn rate calculator is currently available for US residents only

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What is burn rate?

Burn rate indicates how quickly your company is using or “burning” your start-up capital before it starts generating a positive cash flow. In other words, it’s a measure of how long your business can operate until it has to seek more capital. Burn rate is calculated by comparing your cash balance at the start versus the end of the period and then dividing that difference by the number of months.

Helpful tips

You should measure your burn rate carefully as potential lenders and investors will be using it to gauge whether your company will continue to be cash flow positive in the near future. Here are a few helpful tips:

  • It’s important to understand what percentage of your burn rate is from fixed costs (i.e. rent and equipment) compared to variable costs (i.e. marketing and freelancers). If the market or your operations take a negative turn, look at how you can cut your variable costs quickly.
  • There’s no “right” burn rate as it will vary significantly by industry and other factors. A good benchmark is to make sure you have at least six months-worth of cash available based on your current burn rate.
  • Concerned about your start-up’s burn rate? Set up a plan with a personalized accounting coach to make sure your bookkeeping is on the right track and to get advice when you need it.
  • You can view automatic and up-to-date cash flow reports for your business by using Wave's free accounting software.
  • Check out our other accounting tools that can help you calculate cash flow, budget, and more!

Frequently Asked Questions

Is your software actually free?

Yes! Our invoicing, accounting, and US-only banking software is 100% free—no trials, subscriptions, or hidden fees.

What’s the catch—how does Wave make money?

Wave makes money through our optional, paid money management products. Depending on your business needs, you can choose to pay for online payment processing, payroll, and 1:1 advisors. This allows our core software—invoicing, accounting, and business banking (currently only available to sole proprietors in the US)—to always be free.

Do I need to enter my credit card details to sign up?

Put your wallet away. You won’t need to enter a credit card unless you want to use our payroll service. Just create your account and get started for free.

Do I need to install any software?

Wave is 100% web-based, so you just need an Internet connection and browser. You can, however, download and install our mobile invoicing app for iOS and Android.

Is my data secure?

Completely. Our servers are protected physically and electronically. Any connection between you and Wave is protected by 256-bit SSL encryption. Wave is a PCI-DSS Level 1 Service Provider.

Do you provide customer support?

We provide different levels of support for customers who use different parts of Wave. Full details on how Wave support works are available here.

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