Should partner distributions be counted as monthly expenses?

Yes, any guaranteed base partner draw required for living expenses must be included in monthly expenses. Only discretionary year-end profit sharing should be excluded.

Professional Services•Recommended Target: 4–6 months

Consulting Runway Calculator

Consulting firms generate healthy gross margins, but lengthy enterprise procurement and Net-60 or Net-90 invoice settlement can starve a firm of liquid cash. Calculate your firm’s operating runway to manage partner draws safely.

Industry Benchmark Guidance (4–6 months):Management and technology consulting practices typically maintain 4 to 6 months of fixed operating expenses and baseline staff payroll in reserve. This protects the firm when large enterprise client approvals stall during fiscal year transitions.

Quick PresetsClick to test scenario

Current Available CashLiquid reserves

Monthly Revenue

Monthly ExpensesGross Burn

Monthly Revenue Growth

Monthly Expense Growth

One-Time Upcoming Expense

Occurs in Month

Additional Funding Cushion

Arrives in Month

Estimated Cash Runway

Profitable / Default Alive

Sustainable / Infinite

You are generating positive net cash flow of $8,000/month. Your cash balance is growing.

Estimated Cash Depletion:Indefinite

Net Burn:$8,000/mo

Net Monthly Burn

$8,000

Expenses − Revenue

Gross Burn (Expenses)

$46,000

Total monthly outlays

Current Cash

$110,000

Liquid reserves balance

Break-Even Target Revenue

Monthly sales required to eliminate cash burn entirely: $46,000/month

Gap: +$8,000/mo

Projected Cash Remaining

Based on trajectory

After 3 Months$86,911

After 6 Months$66,716

After 12 Months$36,264

Projected Cash Trajectory (24-Month Horizon)

Real-time projection showing monthly cash reserves over time.

Cash Balance

Zero Cash Threshold

Hover or tap any month marker to inspect exact projected cash balance, revenue, and burn for that period.

“What If?” Scenario Modeling

Test how cutting burn, expanding sales, or raising capital extends your survival timeline.

Reduce expenses by 5%Sustainable

Save $2,300/mo (new expenses: $43,700/mo)

Runway:

SustainableSustainable / Infinite

Reduce expenses by 10%Sustainable

Save $4,600/mo (new expenses: $41,400/mo)

Runway:

SustainableSustainable / Infinite

Reduce expenses by 20%Sustainable

Save $9,200/mo (new expenses: $36,800/mo)

Runway:

SustainableSustainable / Infinite

Financial Calculation Methodology & Transparency

How the Runway Calculator Works: Mathematical Model & Assumptions

1. Static Cash Runway Formula

For businesses with steady revenue and predictable overhead, runway is determined by dividing liquid cash reserves by net monthly cash deficit:

Runway (months) = Available Cash ÷ Net Monthly Burn

2. Gross Burn vs. Net Burn

Gross Burn: Total cash disbursed each month (payroll, contractors, hosting, rent, utilities).
Net Burn: Gross monthly expenses minus total monthly cash revenue collections.
Break-Even: When Net Burn $\le$ $0$, cash runway is mathematically sustainable or infinite.

3. Dynamic Growth Projections & Interpolation

When revenue growth or expense inflation rates are enabled, the engine calculates month-by-month compound flows up to 60 months:

Ending Cash(m) = Beginning Cash(m) + Revenue(m) - Expenses(m)

Fractional Month = Beginning Cash(depletion) ÷ Monthly Net Burn

We linearly interpolate the exact day/fraction when cash reaches $0, avoiding arbitrary rounded whole months.

4. Client-Side Privacy Guarantee

Every financial computation executes exclusively inside your local browser runtime. No financial balances, revenue figures, or payroll numbers are sent to any remote server or database.

Primary Cost Drivers

Major Burn Drivers for Consulting Practices

Core Consultant Salaries & Subcontractors

Fixed monthly payroll for staff consultants and specialized subject-matter contractors.

Extended Enterprise Payment Cycles

Invoices held by client accounts payable departments for 60 to 90 days after delivery.

Business Development & RFP Proposal Costs

Unbilled senior partner hours dedicated to pitching enterprise proposals and client relationship management.

Actionable Levers

How to Extend Consulting Practices Runway

Structure Value-Based Retainers with Monthly Auto-Pay

Require corporate clients to authorize ACH or credit card auto-pay on the 1st of each month.

Tether Partner Bonus Draws to Actual Cash Collections

Distribute profit bonuses only when client funds have cleared into bank deposits, not on accrual billing.

Charge Mobilization Fees on Advisory Engagements

Collect a 20–25% mobilization fee upon contract signature to cover consultant allocation costs upfront.

Worked Calculation: Specialized Cloud Architecture Consultancy

Starting Cash$110,000

Monthly Cash Inflow$38,000

Monthly Cash Outflow$46,000

With $110,000 cash, $38,000 in monthly client billing, and $46,000 in consultant payroll and overhead, net burn is $8,000/month. The firm has 13.8 months of runway ($110,000 ÷ $8,000), providing stability while negotiating new enterprise master service agreements (MSAs).

Frequently Asked Questions: Consulting Practices Runway

Common questions and financial benchmarks for consulting practices.

If one client represents over 30% of your consulting revenue, calculate a worst-case scenario where that client leaves to see if your cash reserves survive.