Quick Insight
Your cash runway is the amount of time until you run out of cash. The longer the runway, the better the odds that your company will survive for the long term. Decide how much cash you're willing to risk in your runway and then launch your company or project when you have it in the bank.
You're ready to launch when you've built your runway. Your cash runway is the amount of time until you run out of cash. Have a business plan that estimates when your company will start producing positive net cash flow. This is when it's providing cash to you instead of using up your cash.
The length of your runway is how long you are giving your company the chance to reach the point of producing cash. The longer the runway, the better the odds that your company will survive for the long term. Decide how much cash you're willing to risk in your runway and then launch when you have it in the bank.
Business is tricky because once you start your takeoff, your runway often gets shorter. You’re like a business pilot who’s trying to get the plane off the ground at the same time you’re trying to find cash to build more runway. You’re moving back and forth between the cockpit and the construction crew.
Launching always takes longer than you think. Be conservative when estimating how long until you’re making profits. The more cash you start with, the less time you have to split your time later between pilot and construction crew. That cash also reduces your odds of a crash.
I wish you the cash you need to soar. I wish you well.
- Rob Stephens
Further Insight
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