Ten warning signs
- Runway under six months and you have not started a raise
- Monthly burn higher than the plan for three months in a row
- Customers paying later than their agreed terms
- Receivables growing faster than revenue
- Payroll and rent are the first things you check in the bank each Monday
- You cannot say which marketing spend produces customers
- Vendor bills are being paid late to protect cash
- Software and tool subscriptions have grown without review
- The cash forecast is more than four weeks old, or does not exist
- The month-end numbers arrive after the next month has started
How to check each sign
- Runway: cash on hand divided by average net burn of the last three months
- Burn trend: net burn against the plan for each of the last three months
- Payment delays: average days customers take to pay, against terms
- Receivables: debtor days and the share of invoices over 30 days
- Spend return: customers and revenue per spend line over 90 days
- Forecast age: date of the last update and who owns it
What to do in the first week
1. Build or refresh a 13-week cash forecast with real bank balances
2. Mark the week where cash falls below your safety buffer
3. List every spend line and sort by return, then pause the weakest
4. Call the five biggest late-paying customers and agree dates
5. Decide the date by which you must start fundraising or cut costs, and write it down
Get help early
The earlier you act, the more options you have. Book a free discovery call and we will go through your numbers and agree what to fix first.
Frequently asked questions
What is a healthy runway for a startup?
There is no universal number, but many founders aim to keep at least six months and to start fundraising well before it falls below that. Your own forecast and funding timeline decide.
How do I calculate startup runway?
Divide cash on hand by average monthly net burn over the last three months. Use the free runway calculator to try different scenarios.
What should I do first when cash is tight?
Build a 13-week cash forecast with real balances, find the week cash drops below your buffer, and decide what to cut, collect or raise before that date.
Can I run out of cash while profitable?
Yes. Profit is not cash; timing of collections, payroll and tax can drain the bank while the profit and loss looks healthy.