Run Rate vs Burn Rate: The Two Numbers Every Business Should Know (But Most Aren’t Getting From Their Bookkeeper)

December 8, 2025

Every business owner wants to know one thing:"How long can we sustain what we're doing — and how fast can we scale?"

Two little metrics hold the answers: run rate and burn rate.

They’re not just financial buzzwords. They are directional indicators. Survival indicators. Strategy indicators. And yes — they're far more powerful than just looking at your P&L and hoping today looks better than last month.

Yet most small businesses never see these numbers.Not because they're unimportant — but because traditional bookkeeping is not set up to calculate them.

Let’s break it down.

What Is Run Rate?

Run Rate = annualized revenue based on your current performance.

Think of run rate as your business at full stride — projecting today's performance into future expectations.

If you made $80,000 this quarter, your run rate is roughly $320,000 annually.If you suddenly land three big clients? That run rate changes.If you lose a contract? It changes again.

Run Rate tells you:

• Where your business is trending, not just where it’s been

• What revenue you can reasonably plan for in the next year

• Whether your financial goals are realistic or fantasy

This is your growth conversation.

What Is Burn Rate?

Burn Rate = how fast you're spending money — and how long until cash runs out.

Burn rate answers the question every founder thinks about at 2 a.m.:

"How many months can we survive if nothing meaningfully changes?"

If your business spends $25,000 per month and you have $200,000 in the bank, you have about 8 months of runway.

Burn Rate tells you:

• When you’ll run out of cash if revenue stalls

• When you need to raise prices, raise capital, or reduce expenses

• Whether you should grow responsibly or accelerate growth

This is your sustainability conversation.

Why Both Metrics Matter Together

One without the other is like having headlights with no fuel gauge — or fuel with no windshield.

Run rate shows what your business could be.Burn rate shows how long you can keep going while you get there.

Together, they help answer:

Question	Run Rate	Burn Rate
Are we growing?	Yes	No
Can we afford growth?	No	Yes
Are we scaling responsibly?	Yes	Yes
Are we headed for a cliff?	No	No

When both numbers are monitored, you stop guessing and start steering.

So Why Aren’t Bookkeepers Providing These Numbers?

Because bookkeeping is backward-looking by design.

Bookkeepers close months. Reconcile transactions. Categorize history.

But run rate and burn rate are forward-looking financial models.They require forecasting, cash flow modeling, strategic financial insight, scenario planning (“what if we hire?”, “what if revenue dips?”), and ongoing monitoring — not just month-end checkboxes.

This isn't "enter the receipts and reconcile the bank feed" work.

This is CFO-level financial strategy.And most business owners don’t know what they’re missing until they see it.

Here’s the truth:

Your books tell you what happened.Run rate and burn rate show you what’s coming.

If you don’t know both — you’re driving without a map.

At Outgrow Accounting & Finance, we build these models so business owners stop reacting and start predicting. We translate numbers into direction, not just reports into PDFs. Because decisions deserve data, not hope.

Ready to know your runway? Ready to scale with clarity instead of panic?

Let’s calculate your burn rate, run rate, and growth trajectory — together.Outgrow Accounting & Finance is here to help you outgrow uncertainty with strategy, not just spreadsheets.