Here's a question I like to ask owners heading into winter: if work slowed way down tomorrow, how many months could you keep paying your people and your bills?
That number is your cash runway, and most owners have never actually figured it out. For a lot of contractors and trades in Northern Nevada, winter is when it matters most. Cold weather and short days slow some outdoor work, but payroll, insurance, rent and truck payments keep coming on schedule. Knowing your runway turns a vague worry ("I hope we make it to spring") into a number you can plan around.
The simple version:
Cash in the bank ÷ monthly burn = months of runway
Cash in the bank is what's actually there today, not counting money you've set aside for taxes.
Monthly burn is what goes out each month minus what still comes in during a slow month. Payroll, rent, insurance, truck payments, software, your own pay, less whatever revenue a slow month realistically brings.
Hypothetical: a landscaping company has $90,000 in the bank. In a slow winter month, costs run about $30,000 and sales bring in about $18,000. Monthly burn is $12,000. $90,000 ÷ $12,000 = 7.5 months of runway. If winter sales dropped to zero, the same cash would cover only three months.
What to do with the number:
If it's comfortable, decide what that cushion is for. Maybe it's the equipment you've been waiting on, or a slower, more careful hire.
If it's tight, you have time to act: push on past-due invoices, trim costs that don't earn their keep, or line up a line of credit while the numbers still look good.
Either way, pair it with a forecast. Runway is a snapshot. A rolling 13-week forecast shows the timing, and knowing your runway doesn't obviate the need to see which weeks get tight.
Recheck it every month. Runway moves when you hire, buy equipment, take a big deposit, or carry a slow-paying customer. A quick update after each month's books are caught up keeps the number honest. And be honest about the inputs: if a customer is 90 days late, don't count that money as cash yet.
This is one of the first numbers I look at with fractional CFO clients, because it changes how calm (or not) every other decision feels.
If you'd like help figuring out your runway and building a plan around it, fractional CFO support starts at $1,500/month with a free consult: https://www.twomilesadvisory.com/fractional-cfo-reno
— Rachel, Two Miles LLC