Independent Work Economics · Decision Lab
Will we reach break even before cash runs out?
Two finish lines decide the answer. One is the first month cash reaches zero. The other is the first month cash coming in covers cash going out. This lab shows which arrives first and what realistic change could reverse the result.
Worked example
A small business is close, but not close enough.
It starts with $150,000. Month one collects $40,000 and pays $65,000. Cash collected grows 6% each month. Cash paid grows 1%. StepShown repeats those visible assumptions for 120 months.
Example answer
No, cash reaches zero first
Cash reaches zero or less in month 10. Monthly cash in first covers cash out in month 12. The plan has a two month funding gap.
Citable calculation receipt
What this page calculates
- Formula
- Ending cash equals starting cash plus outside money plus cash in minus cash out. The focused lab uses no outside money.
- Decision rule
- “Yes” means operating cost coverage occurs before the first ending balance at or below zero.
- Method version
- Startup Runway engine version 1.1
- Updated
The model uses smooth monthly changes. It does not know exact payment dates, seasonality, taxes, debt terms, late invoices, inventory needs, customer loss, or whether funding will close. Keep those limits visible when using the receipt.
How this tool was checked
Sources and review
StepShown checked the calculation code and its tests. The answer is still an estimate, not professional advice. Rules can also be different where you live.
- Calculation version
- Version 1.1
- Last updated
- Person responsible
- StepShown engineering
- Managing Cash Flow: Participant Guide
Published by Federal Deposit Insurance Corporation. Area covered: United States. StepShown owner: StepShown editorial. Checked . Check again by . Monthly cash flow projections that carry ending cash into the next opening balance and separate operating, investing, and financing cash activity. Reference guidance; no date specific value is ingested.
- Manage your finances
Published by U.S. Small Business Administration. Area covered: United States. StepShown owner: StepShown editorial. Checked . Check again by . Tracking available cash, accounts receivable, accounts payable, payroll, and the timing difference between accrual and cash accounting. Reference guidance; no date specific value is ingested.
- Ready to Raise Capital
Published by U.S. Securities and Exchange Commission staff. Area covered: United States. StepShown owner: StepShown editorial. Checked . Check again by . Calculating runway from projected expenses and preparing a specific plan for how outside funding would meet those expenses. Reference guidance; no date specific value is ingested.
Read before deciding
Read the StepShown calculation and writing rules, or report a problem.
Follow the independent work path
- 1Compare the offersSee the money and benefits on each side.
- 2Set a sustainable rateCount unpaid time, business costs, and money kept in the business.
- 3Find the sales thresholdSee how many sales cover costs and reach the goal.
- 4Build the full cash planAdd spending growth, funding timing, and the monthly schedule.