Gross Burn

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

What is Gross Burn?

A company's Gross Burn is the total cash spent on operations. These costs typically include all salaries, rent, and other overhead as well as interest and taxes. This metric is often confused with Net Burn, which is a measure of negative cash flow, and includes revenue and expenses.

Gross Burn Formula

ƒ (COGS + Salaries and Overhead + Depreciation and Amortization + Other Operating Expenses + Interest and Taxes)

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What is a good Gross Burn benchmark?

The median monthly cash burn is $175K for companies making between $2.5M and $10M ARR.

Gross Burn benchmarks

Monthly Cash Burn by ARR Scale

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OpenView, 2020
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How to visualize Gross Burn?

Use a summary chart to visualize your Gross Burn data and compare it to a previous time period.

Gross Burn visualization example

Gross Burn

$1323

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58.13

vs previous period

Summary Chart

Here's an example of how to visualize your current Gross Burn data in comparison to a previous time period or date range.
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Gross Burn

Chart

Measuring Gross Burn

More about Gross Burn

Gross Burn includes expenses such as manufacturing costs, salaries, contractors, sales commissions, employee benefits, marketing and advertising, transportation and travel, amortization and depreciation, rent, repairs, and taxes.

In most cases, Gross Burn is reported as a monthly number.