Gross Burn Rate

The total amount of cash your business spends in a month.

Knowing your burn rate is essential for determining how much cash your company needs in order to keep operating and growing. It lets you know if you have extra cash to reinvest in your company to increase marketing efforts or improve product development. Also, it helps you see if you need to change your current plans by pursuing new fundraising opportunities or cutting costs.

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Formula

Gross Burn Rate = Total cash out at end of month


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