All terms
Finance
Gross burn
Total monthly cash outflows before revenue offsets them.
In plain English
Everything you spend in a month. Salaries, software, hosting, ads, rent, contractors.
Example
A 3-person startup spending $25k on salaries + $5k on tools + $3k on ads = $33k gross burn.
Why it matters
Gross burn is what you'd be left with if revenue suddenly went to zero. It's the worst-case monthly cost — the number to know when modelling downside scenarios.
Common mistakes
- Forgetting annual or quarterly expenses prorated to monthly