How to calculate runway when revenue is lumpy

Maya Okafor

Oct 28, 2026

6 min

Most founders divide cash by last month's burn. With annual contracts and uneven collections, that number is wrong in one direction or the other.

Separate cash from revenue

Build the forecast from bank movements, not invoices. Annual prepayments land as cash on day one but cover twelve months of service; model both lines.

Use a floor and a base case

Report two runway numbers every month: a floor that assumes no new bookings and a base case. The gap between them is your hiring budget.

The takeaway

If you can only change one thing, replace the single runway number with a floor and a base case.

Next step / 20 minutes, no deck

Seeyourrunway.

Bring last month's bank balance. We'll send back the date the cash runs out and one decision to change it.

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