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Weekly Burn Rate Formula:
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Weekly burn rate represents the amount of money a company spends each week to operate its business. It's a crucial metric for startups and businesses to monitor their cash flow and runway.
The calculator uses the weekly burn rate formula:
Where:
Explanation: This calculation provides a more accurate weekly burn rate by accounting for the actual number of weeks in a year, rather than simply dividing by 4.
Details: Monitoring weekly burn rate helps businesses understand their cash consumption patterns, predict runway length, and make informed decisions about fundraising, cost-cutting, and growth strategies.
Tips: Enter your total monthly operating expenses in dollars. Include all recurring costs such as salaries, rent, utilities, software subscriptions, and other operational expenses.
Q1: Why use 4.33 instead of 4 for weekly calculations?
A: Using 4.33 (52 weeks ÷ 12 months) provides a more accurate average since months have varying numbers of weeks, and this accounts for the full year.
Q2: What is considered a good burn rate?
A: A "good" burn rate depends on your business stage, funding, and growth trajectory. Generally, it should align with your business plan and provide sufficient runway.
Q3: How often should I calculate burn rate?
A: Monthly calculation is standard, but weekly monitoring is recommended for early-stage startups or businesses with tight cash flow.
Q4: What expenses should be included in burn rate?
A: Include all operating expenses: salaries, rent, utilities, marketing, software, professional services, and other recurring business costs.
Q5: How does burn rate affect runway calculation?
A: Runway = Current Cash ÷ Monthly Burn Rate. Understanding your weekly burn helps project how long your funds will last at current spending levels.