
How far to the future should a startup look? - Harj

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Harj
I'm currently doing a bit of financial planning for our startup - nothing
serious just playing with some numbers to see how much money we'd burn if we
hired a few more people and how much longer that means we could last for.

A question I'm interested in getting opinions on is how much "runway" a
startup should typically look at having at any one time. This isn't really
something I've personally paid attention to before but I want to give it at
least some thought before I move back onto important stuff.

Perspectives welcome.

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boris
I think it depends at what stage you are. If you are at the beginning then the
answer is in the (conservative) estimate of how long it will take you to start
getting some real money in. This can be very tricky to get right so be very
conservative.

If you are already at a stage where you have some cash inflow from sales then
I would say 6 months reserves is what you need. If you see that you have more
than enough cash in the bank to last you 6 months without any sales then I
would say expand.

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danw
<http://www.carsonified.com/misc/survey-how-much-cash-for-small-business>
might be of interest.

