Your company’s burn rate describes how quickly it’s losing (burning) money. Many venture-backed startups need time and money to build their customer base and improve their products or services before becoming profitable.
"Burn rate" refers to the rate at which a company consumes or "burns" its available cash or financial resources to cover operating expenses and sustain its operations. It is typically measured as a monthly or annual expenditure and is an important metric for startups and small businesses. A high burn rate indicates that the company is spending money at a faster rate than it is generating revenue, which can lead to financial challenges if not managed effectively. Monitoring and managing the burn rate is crucial for ensuring the company's financial sustainability, extending its runway, and achieving long-term success.