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The Importance of Burn Rate and Cash Runway

Up and Running

If you’re out of cash, you’re out of business. If you’re running a startup or small business in these times, you have to be thinking about a Plan B and even a Plan C. As I write this, at least 20% of the United States is on lockdown and only “essential” businesses have their doors open. You have positive cash flow.

Burn Rate 100
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The Virus Survival Strategy For Your Startup

Steve Blank

With the Covid-19 virus a worldwide pandemic, if you’re leading any startup or small business, you have to be asking yourself, “What’s Plan B? While the impact on small businesses and workers in the “gig-economy” hasn’t made the news, it will be worse for them. But next the question is, ‘What happens to my business?”.

Burn Rate 436
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Three questions to answer about your COVID response

Berkonomics

Many businesses threatened with closure forever. Small businesses are the most vulnerable, even though most have furloughed employees. Rent and other fixed costs continue, even when revenues have dried up – a fatal combination. Plan for reductions in fixed overhead, salaries, and other costs now.

SBA 87
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Startup Grind Turns the Tables on Mark Suster

Both Sides of the Table

You know, there were a number of small businesses in San Diego that were producing hard drives and computer assemblies and, you know, a lot of stuff in the IT sector, and I had gone off to meet a bunch of them because I didn’t know if I could get a job. They paid engineers $4,000 more entry-point.

Cofounder 337
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The Cost Equation for a Startup is Better Than Ever

Startup Professionals Musings

I now see and believe business plans that budget $1K for all this, versus a previous $20K or more. Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks.

Cost 255
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You Don’t Need to be Rich to be an Entrepreneur

Startup Professionals Musings

I now see and believe business plans that budget $1K for all this, versus a previous $20K or more. Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks.

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Is Your Startup Tracking the Right Metrics?

Up and Running

The other thing that they’re going to ask you is average revenue per account or per user or per customer. You need to understand how much money is brought in by each individual account or user when looking at the overall revenue. It’s what’s going to make you most attractive to an investor. If we increase our-.

Metrics 84