How Long Can My Business Survive Without New Sales?

Scenario / Situation

How long could your business survive if all new revenue stopped today?

Most business owners do not know the answer to this question precisely. They have a rough sense — 'a few months', 'not long', 'we'd be fine for a while' — but not a number. That imprecision is a risk in itself.

Cash runway is the number. It tells you exactly how much time you have to adjust before a cash crisis becomes an existential threat.

Why it happens

Cash runway is not an accounting concept. It is a survival calculation. The formula is simple:

Cash runway = Current cash balance ÷ Monthly net cash outflow

Monthly net cash outflow is your total monthly cash expenditure — payroll, rent, supplier payments, loan repayments, VAT, and overheads — minus cash you realistically expect to collect from existing receivables, not new revenue.

Example: if you have AED 300,000 in cash and your monthly net cash outflow is AED 75,000, your runway is 4 months.

What to check

Use cash outflow, not accounting cost. Depreciation does not consume cash. Loan principal repayments do.

Include VAT obligations. UAE businesses often underestimate quarterly VAT cash requirements as a drain on runway.

Account for collections from existing receivables. If you have AED 200,000 in receivables that will likely collect within 60 days, your effective runway is longer — but only if those collections are reliable.

Be conservative on receivables. Use 70 to 80 percent of overdue receivables as a realistic collection estimate, not face value.

Runway below 2 months is acute risk. Runway between 2 and 4 months is high risk. Runway between 4 and 6 months gives time for deliberate action. Six months or more is healthier, but it should be protected rather than assumed safe forever.

What to do

Once you know your runway, the decision set becomes clearer. If it is under 3 months, cost reduction and aggressive collections become immediate priorities. If it is 4 to 6 months, you have time to make considered decisions about financing, hiring, or restructuring. If it is above 6 months, the focus should shift to protecting that buffer while the business grows.

Closing insight

Knowing your runway number is not pessimism. It is the most basic financial intelligence a business operator can have. The businesses that fail abruptly are usually the ones that did not know this number until it was too late to act.

If this is your situation → use the Cash Runway Calculator.