How to Calculate Burn Rate in Google Sheets

Knowing your burn rate is one of the most important aspects of running a healthy business, especially when you're just starting out. It's the metric that tells you how quickly you're spending your cash reserves. This article will walk you through a clear, step-by-step process for calculating and tracking your burn rate using Google Sheets.

What Exactly Is Burn Rate?

Burn rate is the speed at which your company spends money, specifically its venture capital or reserve cash, before it starts generating positive cash flow. Think of it as the measurement of negative cash flow. If your company is spending more money than it brings in, you are "burning" through your cash. It's an essential health metric for startups and growing businesses because it directly influences your financial runway - how long you can operate before you run out of money.

Understanding this number helps you make critical decisions about hiring, spending, fundraising, and your overall growth strategy. Without a clear picture of your burn rate, you're essentially flying blind.

Gross Burn vs. Net Burn

Before we jump into Google Sheets, it's important to understand the two types of burn rate. They tell slightly different stories about your company's finances.

• Gross Burn Rate: This is the total amount of money your company spends in a given period (usually a month). It includes all your operating expenses like salaries, rent, software subscriptions, marketing costs, and other overhead. It shows your total spending without considering any revenue.

• Net Burn Rate: This is the number most founders focus on. It's the total amount of money your company loses in a month. You calculate it by subtracting your incoming revenue from your gross burn (total expenses). If you spend $50,000 in a month but bring in $30,000 in revenue, your net burn is $20,000.

While both are useful, Net Burn is the go-to metric for calculating your cash runway and understanding your true financial position.

Step 1: Gather Your Financial Data

To calculate your burn rate, you need accurate financial data. You can't rely on guesswork. Before you even open Google Sheets, you'll need to pull some numbers. The goal is to get a clear picture of all the cash coming in and all the cash going out for at least the last three to six months.

Here's what you need to collect for each month:

• Starting Cash Balance: How much cash did you have in the bank at the very beginning of the month?

• Ending Cash Balance: How much cash did you have left at the very end of the month?

• Total Revenue/Cash In: How much money did the business bring in during the month? This includes sales, investment funding, or any other cash deposits.

• Total Expenses/Cash Out: How much money did you spend? Look through your accounting software (like QuickBooks or Xero), bank statements, and credit card statements to list all your operating costs. This includes:

  • Payroll and contractor payments

  • Rent and utilities

  • Software subscriptions (SaaS tools)

  • Marketing and advertising spend

  • Inventory costs

  • Professional services (legal, accounting)

  • Any other business expenses

Having several months of data is much more useful than looking at a single month, as it helps you spot trends, account for seasonality, and calculate a more reliable average.

Step 2: Set Up Your Google Sheet Template

Now it's time to build your burn rate calculator in Google Sheets. The structure is simple and designed to give you a clear, month-by-month view of your finances.

Create a new Google Sheet and set up the following columns:

• Column A: Month

• Column B: Starting Cash Balance

• Column C: Cash In (Revenue)

• Column D: Cash Out (Expenses / Gross Burn)

• Column E: Ending Cash Balance

• Column F: Net Burn Rate

Your blank sheet should look something like this:

Insert a visual layout if needed.

Entering Your Historical Data

Populate the sheet with the data you gathered in the previous step. Enter the months in Column A. For each month, fill in Column B (Starting Cash), Column C (Cash In), and Column D (Cash Out).

A quick tip: Notice that you don't need to manually enter the Ending Cash Balance for every month. You can use a formula to calculate it based on the previous month's data. Likewise, the Starting Cash Balance for a new month is simply the Ending Cash Balance from the previous month.

For example, if your first month of data is in row 2:

• In cell E2 (Ending Cash for the first month), enter the formula:=B2+C2-D2This takes your starting cash, adds what you brought in, and subtracts what you spent.

• In cell B3 (Starting Cash for the next month), enter the formula:=E2This carries over the ending balance.

You can then drag these formulas down for all your subsequent months.

Step 3: Calculate Your Monthly Burn Rate and Average

With your data organized, you can now calculate your net burn rate for each month.

The Net Burn Rate Formula

There are two simple ways to calculate your monthly net burn. Both give you the same result.

1. Method 1: Change in Cash PositionFormula: Starting Cash Balance - Ending Cash Balance

2. Method 2: Expenses vs. RevenueFormula: Cash Out (Expenses) - Cash In (Revenue)

Let's use the second method for our Google Sheet. It's slightly more intuitive for day-to-day thinking about operations.

In cell F2, enter the following formula:=D2-C2This subtracts your monthly revenue from your monthly expenses. Drag this formula down the column to calculate the Net Burn for every month you have data for. If the number is positive, that's your burn. If it's negative, congratulations – you had a cash-flow positive month!

Your spreadsheet should now look similar to this, with calculated values for Ending Cash and Net Burn:

Insert sample table if needed.

Calculating Your Average Monthly Burn

A single month can be an outlier. To make reliable forecasts, you need to know your average monthly burn rate. This smooths out any unusually high-spending or high-earning months.

Find an empty cell on your sheet (perhaps underneath your Net Burn Rate column) and use the AVERAGE function.

If your monthly burn rates are in cells F2 to F7, the formula would be:=AVERAGE(F2:F7)

This single number is incredibly powerful. It represents your typical monthly cash need and is required for the next critical calculation: your cash runway.

Step 4: Calculate Your Cash Runway

Now that you know your average burn rate, you can answer the most important financial question for any founder: "How long can we stay in business with the money we have?" This is your cash runway.

The formula is simple:

Runway (in months) = Current Cash Balance / Average Monthly Net Burn Rate

Let's add this to your Google Sheet. Find another empty cell and label it "Cash Runway (Months)."

The formula will reference your most recent ending cash balance and your average burn rate calculation. Assuming your most recent cash balance is in cell E7 and your average burn is in cell F9:

=E7/F9

The result is the number of months your company can operate before running out of money, assuming your current revenue and expense trends continue.

Step 5: Visualize Your Data with Charts

Numbers in a spreadsheet are useful, but charts make trends instantly obvious. A simple bar or line chart can help you and your team quickly see how your revenue, expenses, and burn rate are changing over time.

Here's how to create a chart to visualize your Cash In vs. Cash Out:

1. Highlight the Month, Cash In, and Cash Out columns (A, C, and D), including headers.

2. Go to the menu and click Insert > Chart.

3. Google Sheets will usually recommend a good chart type, but a "Column chart" or "Line chart" works best.

4. Customize the chart's titles, colors, and axes in the Chart Editor panel.

Creating this visual can reveal insights you might miss just by looking at the numbers. Are your expenses creeping up faster than your revenue? Is there a particular month where spending spiked? A chart makes these questions easier to answer.

Final Thoughts

Tracking your burn rate and runway in Google Sheets gives you a clear and powerful view of your financial health. This simple exercise moves you from guessing about your finances to making data-driven decisions about your budget, growth, and fundraising needs. It puts you firmly in control of your company's future.

While Google Sheets is a fantastic tool for getting started, we know that manually pulling numbers from bank accounts and software every month can be a drag. We built Graphed to automate precisely this kind of tedious reporting. You can connect your financial tools like QuickBooks and Stripe alongside marketing and sales sources like Google Analytics or your CRM. You can then ask questions in plain English like, "Show me a dashboard of my monthly net burn" or "What's my current cash runway?" and get live, interactive dashboards in seconds, without ever exporting a CSV file.