How it works
Most new businesses underestimate two numbers: what it costs to reach breakeven, and how long that takes. This calculator makes both explicit. It adds your one-time startup costs — equipment, deposits, licences, initial inventory — to a year of monthly fixed costs for the year-one total. Then, from your expected monthly profit, it works out the months to breakeven: how long until cumulative profit repays the one-time outlay. The runway figure is the one to commit before launch — the one-time costs plus the monthly burn across every month until breakeven. $15,000 down, $2,500 a month of fixed costs and $3,000 of monthly profit breaks even in five months and needs roughly $27,500 of runway. The honest edge cases matter most. At zero or negative monthly profit the one-time costs are never recovered, so the tool shows only the year-one cost and tells you to rework pricing before committing capital. Breakeven beyond two years is a long exposure for a new business. And one recurring warning applies to everyone: add three to six months of personal living costs to the runway, because the business breaking even and you actually being paid are different events.
Formula
Runway = one-time costs + monthly burn x months to breakeven | breakeven = one-time / monthly profit
Tips
- Runway is the cash to commit before launch — one-time costs plus burn until breakeven.
- At zero monthly profit the one-time costs are never recovered — rework pricing first.
- Breakeven beyond two years is a long exposure; a cheaper launch cuts the risk.
- Recurring costs are easy to forget: subscriptions, insurance instalments, bookkeeping.
- Add three to six months of personal living costs — breaking even is not the same as being paid.
Frequently asked questions
- How do I calculate startup costs?
- Add your one-time costs (equipment, deposits, licences, initial inventory) to a year of monthly fixed costs (rent, software, insurance). Then work out months to breakeven from expected profit — one-time costs divided by monthly profit — and the runway is the cash that covers both until you get there.
- How much runway do I need to start a business?
- Enough to cover one-time costs plus your monthly burn for every month until breakeven, plus three to six months of personal living costs. The business breaking even and you actually drawing a paycheque are different events, so the personal buffer matters.
- What is months to breakeven?
- The time until cumulative monthly profit repays your one-time startup costs — the one-time outlay divided by monthly profit. $15,000 down at $3,000 of monthly profit breaks even in five months. Beyond two years is a long exposure for a new venture.
- What if my business is pre-revenue?
- Set expected monthly profit to zero. The one-time costs are then never recovered by operations, so the calculator shows only the year-one cost and warns you to rework pricing or costs before committing capital — a pre-revenue plan needs funding, not just runway.
- What startup costs do people forget?
- The recurring ones. One-time costs are easy to list, but software subscriptions, insurance instalments, bookkeeping fees and annual licences repeat monthly and quietly inflate the burn. List every recurring bill, not just the obvious launch purchases.