I was at a community event, and I asked this question to a bunch of early-stage founders. (Just to get their thoughts on it)
There were some quick answers:
- Freeze hiring for a while
- Stop/reduce marketing spend
- Reduce operational costs
- Lower targets
- Delay milestones
All these responses made sense.
They were understandable, visible, and felt responsible.
However, they’re also usually the wrong first move.
The runway reflex.
Most founders think of runway as a spending problem.
If cash is running out faster than expected, the assumption is that the business is spending too much.
Monthly burn becomes the number everyone fixates on.
Reduce burn, extend runway. Simple.
The fact is: runway rarely shrinks because of one sudden spike in expenses.
It shrinks because reality’s changing from what you’ve planned
- A few customers start paying later than usual.
- A renewal you expected in March slips to April.
- A cost you thought was one-time shows up again next month.
None of these feel urgent on their own. But together, they change the timing of cash enough that the original forecast stops being reliable.
Most founders don’t notice this drift, because the forecasts still look fine.
Runway problems start with bad forecasts
Track cash timing, burn, and runway in one place with Upmetrics
What cutting costs actually does?
When founders cut before understanding what changed, a few things tend to happen.
You cut what’s easiest, not what’s causing the problem.
- Marketing gets paused even if it was close to paying back.
- Hiring gets frozen even though delivery capacity was already tight.
You start treating timing issues like cost issues.
- A collection’s delay won’t get fixed by cutting payroll.
- A missed renewal won’t improve by software spending was reduced.
In the short term, cuts sure do buy some time.
But in the extended term, they reduce momentum and limit your options.
The business survives the month, but becomes weaker than it needed to be.
So, how do you actually extend the runway?
The first thing that extends runway isn’t cutting.
It’s seeing clearly where the runway is really leaking.
That usually comes down to timing.
For example:
- You realize that receivables are slipping from 30 days to 45, so you tighten follow-ups.
- You notice that a handful of customers are only paying monthly, so you convert them to annual prepay with a small incentive.
- You catch a vendor charge becoming recurring, so you renegotiate the terms.
- You see a large expense hits earlier in the month than expected, so you plan around it.
None of these requires shrinking the business.
They require understanding how cash actually moves, week by week, not just what the monthly burn looks like.
Once you see this clearly, cost cuts become targeted instead of reactive.
The ideal first move
Before doing anything, as a founder, you should be able to answer three questions:
- When does cash reliably come in?
- When does it actually go out?
- What breaks first if nothing changes?
That clarity often reveals that the problem isn’t overspending.
It’s misaligned timing, outdated assumptions, or one weak link that’s quietly dragging the runway down.
On that note, it’s not that you won’t have to cut down anything.
Cutting is sometimes necessary. But it works best when it comes after understanding, not before it.
Seeing clearly won’t eliminate hard choices.
It just makes sure you’re making the right ones.
If you’re struggling to keep track of your cash flow or runway, consider using a financial forecasting tool.
Something like Upmetrics lets you keep forecasts and actual numbers in one place, so you’re not reacting after a problem shows up, but seeing it early.
Anyways, thank you for sticking till the end. Hope you find this to be an insightful read.
Until the next time,
Happy Business Planning 🙂
