Operating Plan & Runway

What this model answers

Start here when your financing question begins with the company itself. Build a monthly operating case, follow when cash arrives and leaves, and identify the gap between the resources available and the plan you intend to fund.

• How long does current cash last, including the financing already entered?
• What happens as revenue, hiring and costs change?
• When does cash reach zero, fall below zero or breach a target buffer?
• How much additional capital is needed to support the plan?
• How do Base, Bear and Bull assumptions change the answer?

The result is a capital requirement grounded in operating assumptions. Financing Scenarios then compares how different instruments fund that same company. Cap Table & Liquidation Waterfall follows the resulting ownership and exit economics.

What goes into the model

Planning horizon and opening cash

Choose a first forecast month and a horizon of 1–60 months. Opening cash is the balance immediately before month 1; a negative amount represents an existing deficit. Changing the first forecast month relabels the calendar while relative event months stay fixed.

Target cash buffer

Set the minimum cash balance you want to maintain. This separates funding that merely avoids negative balances from funding that leaves room to operate.

Revenue streams and growth

Combine growing monthly revenue, fixed monthly revenue and one-time revenue. Each stream has its own amount and active months. Monthly growth compounds from the first active month; it is not an annual growth rate.

Gross margin and collection timing

Gross margin determines revenue less direct costs, before payroll and operating expenses. Revenue is earned and billed in the same modeled month. A whole-month collection delay separates that revenue from customer cash receipts.

Team, hiring, salary and payroll burden

Add individual roles or hiring groups with quantity, annual salary per person, burden and start/end months. Monthly people cost is quantity × annual salary ÷ 12, plus the burden percentage for entered benefits and employer overhead. Payroll includes the full start and end months.

Operating expenses and cost growth

Enter monthly, annual-anniversary or one-time commitments. Monthly expenses can grow each month. Annual expenses appear in full at their start and each anniversary. Payment timing can move the cash outflow after the expense month.

Working capital and opening balances

Set direct-cost payment timing and schedule collection of opening receivables or settlement of opening payables. These explain why an apparently profitable month can still consume cash. Payroll is paid in the month incurred.

Debt

Distinguish new borrowing from debt already outstanding. Enter principal, annual rate, term, interest-only period, amortization and fees. New borrowing provides cash at draw; opening debt creates repayment obligations without another cash inflow. Zero amortization means bullet repayment at maturity.

Equity financing and other cash events

Equity events add an amount in a chosen month. They do not calculate shares or dilution here. Other cash events record separate inflows or outflows outside operating burn; they do not become revenue or expenses automatically.

1. Set up a plan

   Open the workbench. Use “Start a new plan” → “Start blank” or “Use starter example”, review it, then select “Open this plan”. A separate workspace model is created. In Overview, name the plan and set the timeline, opening cash and buffer.

2. Build the operating case

   Work through Revenue, Team and Expenses. Add timing as well as amounts. Use “Working capital & opening balances” in Overview when collections and supplier payments differ from the month earned or incurred.

3. Add existing financing assumptions

   In Debt & financing, enter loans, planned equity cash and other cash events. Inspect the cash trajectory before assuming that positive horizon-end cash means every earlier month is funded.

One company, three operating cases

Base holds the shared company plan. Bear and Bull selectively override assumptions on those same revenue streams, roles and expenses. They do not create three disconnected companies, and their names do not assign probabilities or guarantee a forecast.

Base

Enter the shared assumptions in Overview, Revenue, Team, Expenses and Debt & financing. Changes flow to Bear and Bull wherever an assumption has not been overridden.

Bear

Use Scenarios → “Bear assumptions” to explore selected changes, such as slower revenue growth or later collections. Empty fields inherit the current Base value; an entered value replaces it for this case.

Bull

Use “Bull assumptions” for another operating case, such as stronger growth with additional hiring. Revenue, team and expense amounts or timing can change; opening cash, financing and shared working-capital settings remain common.

Use “Active view” to choose which case the cash outlook displays. This is separate from editing Bear or Bull overrides in Scenarios. Compare the outcomes together, then inspect the monthly path behind the case you intend to finance.

Read the cash path, then the funding gap

Ending cash and minimum cash

Ending cash is the final modeled month-end balance. Minimum cash is the lowest opening or month-end balance anywhere in the plan. A later raise cannot erase an earlier shortfall.

Cash exhaustion

The first opening or month-end balance at or below zero. “First negative cash balance” is stricter: it requires cash below zero. “Beyond horizon” describes only the modeled period.

Additional funding required

“Additional cash to avoid negative balances” covers the shortfall at the minimum balance. “Additional cash to maintain the target buffer” also preserves your entered buffer. Both are additional cash at opening, after the financing already entered; zero survival funding can still leave cash exactly at zero.

Revenue, gross profit and net operating burn

Revenue and gross profit summarize earned activity over the horizon. Net operating burn measures operating cash outflows less collections: positive consumes cash; negative generates it. It excludes debt, equity and other cash events.

Monthly cash ledger

Monthly results reconcile opening cash, operating cash flow, financing, other movements and closing cash. Expand “Show all financial rows” and “Inspect the sources behind a month” to trace a result. Closing receivables, payables and debt show obligations or collections still outstanding.

Worked example · revisit a pre-seed raise

This illustrative case follows a company that initially assumed a $100,000 pre-seed financing. The operating question was whether that raise supported the company while maintaining its cash buffer.

In the reviewed case, the operating plan indicated roughly $54,600 of additional financing to maintain the buffer. Added to the initial $100,000 assumption, that implies approximately $154,600, rounded to a $155,000 capital requirement for the next comparison.

What the operating plan deliberately leaves outside

The model works in whole months and does not establish intramonth solvency. Debt uses nominal annual interest divided by 12, with first service at the end of the draw month; any remaining principal is due at maturity. These conventions simplify timing and must fit the question you are asking.

This is an operating and cash plan, not a complete financial statement or a determination of revenue recognition, statutory payroll or financing-agreement rights. It does not calculate inventory, taxes, ownership or investment outcomes. Currency selection changes denomination without converting amounts. Display values are rounded; results CSV retains calculation precision.

Next: compare financing structures

Once the operating case establishes the capital requirement, select “Compare financing options →” in the workbench. This saves the source and opens Financing Scenarios with a snapshot to review. There, choose the operating case and decide which existing financing events remain in the baseline before comparing new alternatives.

For the illustration, the next question is how $155,000 of priced equity, a post-money SAFE, debt or a blend affects the same cash requirement. The amount alone does not settle the repayment and ownership consequences.

• Read the Financing Scenarios guide →
• Compare financing structures →