A quick guide to starting a startup: the numbers side

TL;DR: A quick guide to starting a startup needs to cover different ground to a small business setup checklist. Startups plan to scale fast, usually spend before they earn, and often raise external money, so the numbers that matter are runway, burn rate, defensible revenue assumptions, start-up costs, funding shape, founder salary and scenario planning. Get these right before you trade, then revisit them monthly.

So, what do you actually need to plan before starting a startup? At minimum: how long your money lasts (runway), how fast you’re spending it (burn rate), a revenue forecast built on stated assumptions rather than guesswork, a full list of start-up costs, a clear view of how you’re funding the business, and a modelled cost for your own salary. This guide walks through each one.

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Startup versus small business: why the economics are different

A startup is not a small business with ambition. That distinction matters because it changes every number in your plan. A small business typically aims to be profitable early and grow steadily from revenue. A startup usually plans to scale quickly, often spends more than it earns in the early years, and frequently raises external funding to bridge that gap. If you’re setting up a conventional small business in the UK, with the legal structure, VAT registration and insurance questions that come with it, our quick guide to setting up and running your business covers that ground in detail. This piece is about the financial planning that’s specific to startups: the growth, funding and runway questions that a standard setup guide doesn’t answer.

Why this split matters for your plan

If you build a startup plan the same way you’d build a small business plan, you’ll likely underestimate your costs and overestimate how quickly you’ll be self-sustaining. Startups need to plan for a period of deliberate loss-making, funded by savings or investment, before the business economics work on their own.

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Runway and burn rate: the two numbers a startup lives by

Burn rate is how much cash your business spends, net of any income, each month. Runway is how many months you can keep operating before you run out of cash, calculated by dividing your current cash balance by your monthly burn rate. Together, these two figures tell you how urgent your funding or revenue targets really are.

Why founders track these from day one

Knowing your runway tells you when you need to raise again, cut costs, or hit a revenue milestone. A startup with six months of runway and no clear plan to extend it is in a very different position to one with eighteen months. Both numbers should sit on your financial dashboard and be checked monthly, not left until the cash is nearly gone.

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Why revenue forecasts are assumptions, not predictions

With no trading history, a revenue forecast can’t be a prediction in the way an established business’s forecast might be. It’s a structured set of assumptions: how many customers you expect to reach, how many will convert, what they’ll pay and how often. The value isn’t in getting the number exactly right, it’s in making the assumptions explicit so you can test and adjust them.

Building a defensible forecast with no trading history

Base your assumptions on comparable businesses, market research, or early pilot data if you have any. Write down each assumption separately, for example customer acquisition cost, conversion rate and average order value, rather than a single guessed revenue figure. That way, when reality differs from the plan, you know exactly which assumption to revisit. Our guide on creating an effective financial forecast with no historical data walks through this in more depth, and if you’re building a subscription or SAAS model specifically, see our notes on cash flow forecasting for SAAS businesses.

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Start-up costs: one-off, recurring, and the ones founders forget

Start-up costs split into one-off costs, such as equipment, incorporation fees and initial stock, and recurring costs, such as software subscriptions, rent and salaries. Founders commonly underestimate recurring costs because they focus on the big one-off purchases and forget the smaller monthly commitments that add up quickly.

Costs that are easy to miss

Insurance, accounting software, payment processing fees, and the cost of any tools you’re trialling but haven’t cancelled all creep into a budget unnoticed. So does the gap between placing an order and receiving invoiced payment, which can strain cash flow even when the business is technically profitable on paper. We cover the detailed maths and category breakdowns in our guide to estimating your start-up costs, so we won’t repeat it here.

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Funding shape: bootstrapped versus raised

How you fund your startup changes the shape of your plan. A bootstrapped business, funded from savings or early revenue, generally needs to reach profitability faster and will plan more conservatively. A business that raises investment can plan for a longer period of spending ahead of revenue, but takes on the responsibility of reporting to investors and working towards the milestones that justified the raise.

Neither route is automatically right

The right shape depends on your market, how capital-intensive your business is, and how much control you want to retain. What matters for your plan is being explicit about which route you’re taking, because it determines your acceptable burn rate and how much runway you need to build in.

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Founder salary as a modelled cost

It’s tempting to leave founder salary out of early plans, or to assume you’ll simply take “whatever’s left”. Model it as a real cost from the start, even if the number is modest or zero for a period. This keeps your plan honest: if the business can’t eventually support a reasonable founder salary, that’s something you need to know now, not two years in.

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Scenario thinking: best, base and worst case

A single forecast tells you one story. Building best case, base case and worst case scenarios shows you the range of outcomes and, more usefully, what happens to your runway if things go wrong. The worst case is the scenario that actually earns its keep: it tells you the point at which you’d need to cut costs, delay hiring, or raise sooner than planned.

What each scenario should flex

Vary your revenue assumptions, your customer acquisition timeline and your major cost commitments across the three scenarios. Brixx’s scenario planning tools let you build these side by side without rebuilding your forecast from scratch each time, which makes it far easier to keep them updated as real numbers come in.

For a fuller explanation of scenario and what-if testing, along with cash flow forecasting more broadly, see our guide on how to forecast your cash flow as a business or startup.

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What to revisit once you start trading

Once your startup is trading, your plan stops being theoretical and starts being a live tool. Revisit these figures monthly: your actual burn rate against your forecast, your remaining runway, how your revenue assumptions compare to real results, and whether your worst case scenario still looks pessimistic enough. If your business has seasonal patterns, also check in on cash flow around your quiet periods; our guide on fixing off-season cash flow problems is useful here, and if inflation is affecting your cost base, see managing inflation in Brixx. If your forecasts keep drifting from actuals, our piece on improving your business’s financial forecasting covers common causes and fixes.

Building this into your routine

Set a fixed date each month to update your actuals against your plan. This is the habit that turns a one-off forecast into a genuine planning tool, and it’s far easier to sustain if your forecast, scenarios and reporting all live in one place rather than scattered across spreadsheets. Brixx’s forecasting tools for start-ups are built around exactly this kind of ongoing planning, from initial forecast through to scenario testing and monthly reporting.

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Frequently asked questions

What is the difference between a startup and a small business?

A startup typically plans to scale quickly and may spend more than it earns in its early years while it grows, often funded by investment. A small business more commonly aims for steady, profitable growth funded from its own revenue. This difference changes how you should plan your finances from day one.

How much runway should a startup have?

There’s no universal answer, but the important thing is knowing your exact figure and reviewing it monthly. Runway is your current cash divided by your monthly burn rate. The lower it gets, the more urgently you need a plan to extend it, whether through revenue, cost cuts or further funding.

How do I forecast revenue with no trading history?

Build your forecast from explicit, separate assumptions such as customer numbers, conversion rates and average order value, based on market research or comparable businesses, rather than a single guessed figure. This makes it easier to identify and adjust the assumption that turns out to be wrong.

Should I include a salary for myself in my startup’s forecast?

Yes. Modelling founder salary as a real cost, even if it starts small, keeps your plan honest about whether the business can eventually sustain you, rather than deferring that question indefinitely.

What should I do with my plan once my startup starts trading?

Review your actual burn rate, runway and revenue against your forecast every month, and update your scenarios as real numbers come in. A startup plan is most useful when it’s kept current rather than built once and left alone.