You've done the maths. At the current burn rate, you have three months of cash left. Maybe less. The number sits in your chest like a stone, heavy and cold, and every morning you wake up knowing it's one day smaller.
Three months of runway is a crisis, but it's not the end — not yet. You still have options. Not comfortable options, not easy options, but real ones. The decisions you make in the next few weeks will determine whether the business survives, pivots, or closes in an orderly way rather than a chaotic one.
This guide is about those decisions. It's written for the founder who's staring at a spreadsheet that says the money runs out in twelve weeks and needs to know, clearly and practically, what to do.
Step 1: Confirm the number
Before you do anything else, make sure your runway calculation is accurate. Founders in crisis are prone to both optimism bias (the numbers are probably better than I think) and catastrophic thinking (the numbers are probably worse than I think). You need the actual number.
Calculate weekly burn rate. Not monthly — weekly. In a three-month runway situation, weeks matter. Include all costs: staff (including employer NIC and pension), rent, utilities, software subscriptions, loan repayments, HMRC obligations, professional fees, and your own salary or drawings.
Map committed revenue. What money is definitely coming in? Not pipeline, not prospects — contracted, invoiced, or otherwise near-certain revenue. Be brutal about this. "They said they'd sign next week" isn't committed revenue until the contract is signed and the payment terms are triggered.
Calculate the gap. Weekly burn minus weekly revenue equals weekly cash consumption. Divide your remaining cash by weekly cash consumption. That's your actual runway in weeks.
Stress test it. What happens if your largest customer pays late? What happens if a major expense arrives early? Build in a buffer — your real runway is probably shorter than the base case calculation suggests.
This exercise takes an hour. It's the most important hour you'll spend this week. Everything that follows depends on knowing the real number.
Step 2: Cut immediately
Three months of runway means you don't have time for gradual optimisation. You need to reduce burn rate now — this week — to extend your runway as far as possible.
Non-essential spending
Cancel every subscription, service, and discretionary expense that isn't directly generating revenue or keeping the lights on. Software you're not using, marketing spend that isn't converting, perks, office upgrades, conferences — all of it, immediately. This typically saves less than founders hope, but every week of extended runway matters.
Your own compensation
If you're paying yourself a salary, reduce it to the minimum you need to survive — or pause it entirely if you can. This is painful and it might not be sustainable long-term, but in a three-month runway crisis, your salary is one of the most flexible costs.
Staff costs
This is the hardest cut and often the most impactful. Staff costs are typically the largest line item for most businesses. The question isn't whether to reduce headcount, but how and when.
If redundancies are necessary, act quickly but legally. Consult an employment lawyer or your insolvency practitioner if costs are truly dire. Give people honest notice — they deserve the opportunity to start looking for other work. Read: What to tell your team when the business is going under.
Every week of delayed action on staff costs is a week of runway consumed. This is not the time for "let's wait and see."
Renegotiate fixed costs
Call your landlord about a rent holiday or reduction. Call your suppliers about extended payment terms. Call your lender about an interest-only period or payment holiday. The worst they can say is no. Many will say yes — they'd rather make a concession than deal with a customer going insolvent.
Step 3: Accelerate revenue
Simultaneously, do everything possible to bring cash in faster.
Chase outstanding invoices aggressively. Every pound owed to you is a pound you need now. Call every debtor. Offer early payment discounts if necessary. Consider invoice factoring — selling your receivables to a factoring company at a discount in exchange for immediate cash.
Close deals faster. If there are prospects in your pipeline who are close to signing, throw everything at getting them across the line. Discounts, favourable terms, personal attention — whatever it takes. A signed deal in two weeks is worth more than a better deal in two months.
Identify quick revenue opportunities. Is there a service you could sell to existing customers? A consulting offering based on your expertise? A one-off project that would generate immediate cash? Creative revenue generation in a crisis isn't strategic — it's survival.
Pre-sell or take deposits. If your product has a development roadmap, can you pre-sell upcoming features? Can you take annual payments upfront instead of monthly? Can you offer a prepaid discount?
Step 4: Explore emergency funding
With three months of runway, you still have time to raise money — but barely. The type of funding available depends on your situation:
Existing investors
If you have existing investors, talk to them immediately. Not with a polished pitch deck — with honest numbers and an honest assessment. "We have three months of runway. Here's what we've done to reduce burn. Here's what we need. Can you help?"
Some investors will bridge the gap with a convertible note or emergency funding. Some won't. But all of them will respect honesty more than discovering the crisis when it's too late to help. If you have a board, convene an emergency board meeting this week.
New investment
Raising a full funding round in three months is extremely difficult but not impossible. If the business has genuine potential and the current crisis is solvable with capital, an accelerated fundraise may be viable. But be realistic: most fundraising processes take four to six months, so you'd need significant interest already in your pipeline.
Debt
Revenue-based financing, business loans, or government-backed loan schemes may be options if the business has revenue and a credible path to viability. The terms will likely be unfavourable given the urgency, but unfavourable terms are better than running out of cash.
Government support
Research whether any government grants, support schemes, or tax reliefs are available for your sector or situation. Innovation grants, R&D tax credits (which can be claimed in advance), and sector-specific support can sometimes provide unexpected lifelines.
Personal investment
Some founders put personal money into a failing business. This can buy time, but it can also convert a business problem into a personal financial crisis. If you're considering this, be brutally honest about the probability of the business surviving. Investing your savings into a company that's going to fail anyway doesn't save the company — it just means you lose your savings too. Read: Rebuilding your personal finances after business failure.
Step 5: Make the strategic decision
Cutting costs and chasing revenue buys time. But time without a plan is just a slower death. Within the first two weeks of recognising the three-month crisis, you need to make a strategic decision:
Option A: Fight to survive
The business is viable if you can bridge the current crisis. The product works. Customers exist. The problem is cash, not fundamentals. If you can extend the runway (through cuts, revenue acceleration, or emergency funding) and there's a credible path to sustainability, fighting makes sense.
What "fight" requires: a realistic financial plan showing a path to cash flow breakeven, evidence that the fundamental business model works, sufficient remaining runway to execute the plan (at least six months after cuts), and the personal energy and health to sustain the effort.
Option B: Pivot
The current approach isn't working, but the team, the technology, or the market position has value that could be redirected. A pivot — to a different product, a different market, or a different business model — might save the company.
What "pivot" requires: a clear hypothesis about what will work differently, enough runway to test the new direction (pivots that require six months to validate don't work with three months of cash), and honest acknowledgement that the current path has failed, not just hit a bump.
Option C: Orderly wind-down
The business isn't viable. Additional investment would delay the inevitable rather than change it. The responsible decision is to close the company in an orderly way — preserving as much value as possible for creditors and protecting employees.
What "orderly wind-down" requires: courage to accept reality, professional advice on the insolvency process, and a commitment to doing it properly rather than letting the company crash. Read: Administration vs liquidation vs CVA: which one is right?.
Option D: Sell the business
Even a struggling business may have value — to a competitor, a strategic acquirer, or a management buyout team. If the business has assets (technology, customer base, brand, contracts) that are worth more as a going concern than in liquidation, a sale might be the best outcome.
What "sell" requires: time (sales processes take months, which you may not have), realistic valuation expectations, and willingness to accept that the sale price may be disappointing.
The timeline trap
Three months feels like a lot until it isn't. The first month disappears into analysis, conversations, and initial cost-cutting. The second month disappears into fundraising attempts, revenue pushes, and strategic deliberation. And suddenly you're in month three with four weeks of cash and no plan.
To avoid this: set weekly milestones. "By end of week 2, costs will be reduced by X. By end of week 4, we'll have a decision on fundraising viability. By end of week 6, the strategic direction will be chosen." Weekly accountability prevents the gradual drift that consumes runway without progress.
The emotional reality
Running out of runway is terrifying. The countdown creates a specific kind of anxiety — time-limited, concrete, and inescapable. Unlike vague business worries, the runway number is precise and it moves in one direction.
This anxiety can be paralysing. The urgency demands action, but the fear inhibits it. You freeze, unable to make the calls, have the conversations, or make the decisions that the situation requires.
If this is happening: talk to someone. Today. Not about the business strategy — about how you're feeling. A co-founder, a mentor, a friend, a therapist. The emotional paralysis is the most dangerous aspect of a runway crisis, because it prevents you from using the time you have left. Breaking the paralysis — through connection, through speaking the fear aloud, through getting someone else's perspective — is the precondition for effective action.
For more on navigating the emotional dimension, read: Why founders don't ask for help (and what to do about it). And if the crisis has already arrived, read: Your business just failed. Here's what to do this week.
What to tell your team
You don't need to share the exact runway number with every employee. But you do need to be more transparent than feels comfortable. Employees who sense trouble but receive no information make assumptions — and their assumptions are usually worse than reality. They also start leaving, which accelerates the decline.
A framework that works: acknowledge that the business is going through a difficult period, explain what you're doing about it (cost reductions, revenue acceleration, fundraising), be honest about the timeline ("we're working to secure the company's future over the next three months"), and commit to keeping them informed ("I'll update you every two weeks on where things stand").
This level of transparency feels risky. What if people panic? What if they leave? Some might. But the people who leave after hearing the truth were going to leave anyway — they'd just have left later, with less time for you to plan around their departure. And the people who stay, informed and committed, are more valuable than a larger team operating on rumour and anxiety.
Your legal obligations
With three months of runway, you're approaching (or already in) the zone where director duties during insolvency become relevant. The key obligations: don't incur new debts that you know the company can't repay, don't pay yourself preferentially over creditors, keep accurate records of your decision-making, and seek professional advice early.
The most important thing is to document everything. Your thought process, the advice you've received, the options you've considered, the decisions you've made and why. If the company ultimately enters insolvency, this contemporaneous record is your best evidence that you acted responsibly.
For a full guide on your legal position, read: Director duties during insolvency: what you need to know.