Burn Rate
Definition
The rate at which a company spends cash, typically measured monthly. Gross burn is total monthly spending. Net burn is spending minus revenue. Used to calculate runway (cash / net burn = months of runway).
Related Terms in Business Terms
Working Capital
Current assets minus current liabilities. Measures a business's ability to pay short-term obligations. Positive working capital means the business can cover its near-term debts.
Break-Even Point
The level of sales at which total revenue equals total costs, so the business makes neither a profit nor a loss. Calculated as fixed costs ÷ (price per unit − variable cost per unit). Knowing your break-even point tells you the minimum you must sell to stay solvent. HelloBooks surfaces break-even analysis from your cost and pricing data.
Budget
A financial plan that estimates expected revenue and expenses over a future period, used to set targets and control spending. Comparing actual results to budget (variance analysis) reveals where a business is over- or under-performing. HelloBooks lets you build budgets per department or project and tracks budget-vs-actual automatically.
MRR (Monthly Recurring Revenue)
The predictable revenue a subscription business earns each month. Calculated by multiplying the number of paying customers by the average revenue per user (ARPU). Key SaaS metric.
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