Charting burn rate and runway without scaring everyone

Burn charts get argued about because two different numbers share the name. Deciding which one you are drawing, and saying so in the title, removes most of the argument.

Gross burn is what you spend

Total cash out per month, ignoring revenue. It is the number that matters for cost discipline, because it does not improve when a single large customer pays early.

Net burn is what you lose

Cash out minus cash in. It is the number that determines runway, and it is far noisier — one late invoice can double it for a month, which is why a single-month net burn figure is close to meaningless.

Runway is a projection, so make the assumption visible

Runway in months is cash divided by net burn, and the only honest version uses a trailing three-month average. Draw the projected months as a dashed continuation so nobody mistakes forecast for history.

The two mistakes

First, using the best recent month as the divisor, which invents runway. Second, plotting burn as a bar chart with a truncated axis, which makes a 5% change look like a crisis.

• Two series: gross burn and net burn, clearly labelled.
• Trailing three-month average for anything projected.
• Dashed line for the future, solid for the past.
• Axis starting at zero.

The best version of this chart is boring: same layout every month, and the only thing anyone discusses is the slope.