10 Simple Ways to Extend Your Startup Runway (With Examples)

10 Practical Strategies to Maximize Your Startup Runway

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Managing your startup runway is crucial for staying in the game. Think of runway as the time you have left before your business runs out of cash. For many startups, extending that time can mean the difference between thriving and shutting down.

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Here are 10 ways to extend your startup runway, giving you more room to focus on growth, all with the help of EvryThink’s financial management tools for startups.

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1. Evaluate Your Expenses and Cut Non-Essential Costs

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The first thing any founder should do when trying to extend their runway is take a hard look at their expenses. Where is the money going, and is it truly necessary for day-to-day operations? This isn’t about trimming everything to the bone; it’s about identifying non-essential costs that could be hurting your financial health. ‍

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Example: one startup I worked with realized they were spending thousands per month on marketing automation tools, even though they weren’t using half the features. By switching to a simpler tool, they saved $12,000 annually, which added an extra month to their runway.

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For example, are you paying for premium software or services you barely use? Could you switch to more affordable alternatives, or free productivity tools?

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EvryThink allows you to keep track of your expenses and offers insights into where you can cut costs. By examining your outflows and identifying what’s essential and what’s not, you can find areas to save money and give yourself more time.

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2. Focus on Higher-Paying Customers

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Not all customers are created equal. While every sale counts, some customers will contribute more significantly to your revenue than others. If your pricing structure includes tiers (e.g., basic, premium, enterprise), it may be time to focus on acquiring more high ACV customers.

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Example: Let’s say your enterprise plan generates five times the revenue of a basic plan. By shifting your focus toward enterprise clients through targeted marketing and outreach, you can significantly increase your monthly revenue and push your runway out by several months.

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Start by analyzing who your current high-value customers are. What drew them to you? What features or services do they appreciate the most? Then, tweak your marketing and sales strategies to attract more customers like them. Instead of spreading yourself thin chasing low-value customers, you’ll be focusing your energy where it can have the biggest impact.

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Pro tip: Use EvryThink’s financial analysis tools to model how acquiring higher-value customers will affect your runway. By comparing different customer segments, you’ll see the potential impact on revenue and how long you can extend your startup’s runway. Or even different revenue streams.

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3. Negotiate Better Payment Terms with Vendors

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Every startup has vendors—whether they’re suppliers, software providers, or contractors. One often overlooked strategy for extending runway is negotiating better payment terms with these vendors. Instead of paying upfront or on short terms (like 30 days), try to negotiate for extended terms, such as 60 or 90 days.

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Example: One founder I know negotiated a 60-day payment window with their largest vendor, which immediately reduced cash flow pressure and extended their runway by another two months. The key here is to maintain good relationships and be open about your needs.

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This gives you more time to generate revenue from your operations before you need to settle your bills, improving your cash flow without borrowing money. Vendors are often willing to negotiate if you have a good relationship with them or if it’s in their interest to keep you as a customer.
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Pro tip: EvryThink can help you model out how different payment schedules impact your cash flow. You can track payment terms for each vendor and see how changing them would affect your overall runway.

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4. Hire Strategically—Or Not at All

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Hiring is one of the largest expenses for any startup, and it can be tempting to bring on more people as your business grows. But before you hire, think about whether it’s truly necessary right now.
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Example: I’ve seen startups extend their runway by six months or more just by freezing hiring or switching to contract workers. One startup held off hiring a full-time product team and instead worked with freelancer, which reduced their burn rate while still getting the help they needed.

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Could freelancers or part-time staff fill the gaps? Can you outsource tasks that don’t require full-time attention? By holding off on hiring permanent staff, you reduce long-term commitments, like salaries, benefits, and other employee-related expenses.

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Alwyas ask this question. Do we have work for 40 hs a week, 160 hs a month over the next 12 monhts? it's not about not hiring, it's about timing.

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Pro tip: EvryThink Talent planning can help you model out different hiring scenarios to see how each one affects your runway. Whether you hire a full-time employee or bring on freelancers, you can forecast the financial impact and make data-driven decisions.

Including their payroll taxes if you decide to hire full time.

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5. Raise Prices—Carefully and Strategically

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Increasing your prices is one of the quickest ways to generate more revenue, but it’s also one of the scariest. Many founders worry about alienating their customers or driving them away with a price hike. However, if done carefully, raising prices can have a positive impact on both your revenue and your runway.

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Example: One SaaS company raised their prices by 10% for new customers while adding a few extra features to justify the increase. The result? Their runway almost doubled in less than six months. It’s all about testing and adjusting based on your customers’ willingness to pay.

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Start by raising prices for new customers first. This allows you to test the waters without disrupting your existing customer base. If you see a positive response, you can gradually increase prices for existing customers by clearly explaining why the change is necessary (e.g., new features, increased value).

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But always expand the offer with new features, new benefits. If the marginal cost allows it.

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Pro tip: Use EvryThink’s pricing tools to simulate the effect of price changes on your revenue and runway. You can experiment with different price points and see how each change will affect your cash flow in the revenue planning.

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6. Get Rid of Non-Essential Perks

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Startups love perks, whether it’s catered meals, fancy office spaces, or cool retreats. But when your runway is tight, these perks can become expensive luxuries. Cutting back on non-essential perks is one of the quickest ways to reduce your burn rate and extend your runway.

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Example: I once worked with a startup that cut back on weekly catered lunches, saving $12,000 per month. That decision, while tough, extended their runway by three months, giving them time to close an important funding round. Or if cutting is impossible because it's part of the culture, renegotiate with vendors.

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Talk to your team about which perks matter most to them, and which ones they’d be willing to cut if it meant keeping the company afloat. The key here is transparency—if your team understand the situation, they’re likely to support the decision.

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Pro tip: EvryThink lets you track how much you’re spending on perks and other extras, so you can easily see how cutting these costs will affect your runway.

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7. Offer Flexible Payment Plans for Customers

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Your customers’ ability to pay is just as important as your ability to charge. Offering flexible payment plans or subscription models can help you attract more customers and smooth out your revenue stream. This could mean offering monthly payment plans instead of annual billing or providing financing options for larger contracts.

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Example: I was looking at the case of one startup that introduced a monthly subscription option for their higher-priced product, which made it more accessible to smaller businesses. This not only increased their customer base but also provided more predictable monthly revenue, extending their runway by several months.

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The more flexible you are with payment, the more customers will stick around, leading to more predictable and steady revenue.

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Pro tip: EvryThink can help you forecast how offering payment plans will impact your cash flow, showing you the trade-off between immediate revenue and long-term income stability. On the revenue planning section you can play with different terms and see how this move your runway and forecast.

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8. Reassess Your Marketing Spend

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Marketing is one of the most crucial areas of spending for startups, but it’s also an area where money can quickly be wasted. It's all about distribution right? Are your current marketing efforts delivering a positive return on investment (ROI)? If not, it’s time to reassess your marketing strategy and focus on the channels that are actually working.

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The key is not to limit the marketing expend, but to measure the result, to be sure every $ invested renders the most benefit fory our startup or business.

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Example: a SaaS company I know realized they were wasting money on paid ads with a low conversion rate (very low). By shifting their marketing budget to higher-performing channels like email marketing, they saved $50,000 a month. Then they turned to micro-influencers, and cut that in half extending their runway by nearly nine months

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Double down on what’s bringing in leads and sales, and cut back on the rest. Sometimes, cutting back on underperforming campaigns can free up thousands of dollars or euros per month without harming your growth.

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9. Consider Alternative Revenue Streams

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Diversifying your revenue can make your startup less vulnerable to downturns. If your business relies on one product or service, consider branching out into complementary offerings or add-ons that can boost your income.

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For example, a SaaS company can ad a consulting service on top of their software product, bringing in an additional $10,000 a month. This extra revenue can extended their runway by over X amount of months, giving them more time to scale their core product.

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Pro tip: EvryThink’s forecasting tools allow you to model how adding new revenue streams will affect your overall financial picture and extend your runway.

10. Leverage Grants and Alternative Financing Option

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Always consider looking into non-traditional financing options like grants, revenue-based financing, or crowdfunding. These options allow you to raise funds without giving up equity or taking on traditional debt.

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Grants, in particular, are an excellent way to boost your runway, especially if you’re in a sector like tech, health, or education where there’s often support available for innovative startups.

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Example One startup was able to secure a $50,000 government grant targeted at small tech companies (e.g the EU Eureka program, or innovation programs) giving them an extra XYZ months of runway.

By using EvryThink to plan how they would allocate the funds, they were able to scale more efficiently without the pressure of giving away equity. For this you can use the Capital planning module to track every grant, or round.

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Revenue-based financing can also be a great alternative. Instead of giving up equity, you pay back a percentage of your monthly revenue. This method is less risky because the amount you repay scales with your revenue—meaning if you have a slow month, you pay less. (NFA-DYOR)

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Pro tip: Use EvryThink to track and forecast the impact of different financing options. Whether you’re considering a loan, grant, or revenue-based financing, EvryThink helps you see the potential effects on your cash flow and runway.

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Final Thoughts

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Extending your startup runway is all about being proactive and making smart financial decisions. Whether it’s cutting non-essential expenses, attracting higher ACV clients, or finding alternative financing options, these strategies can give you the breathing room you need to grow your business.

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EvryThink is designed to help startups, SMEs to manage their finances and stay ahead of the curve. With tools for tracking expenses, forecasting cash flow, and running multiple financial scenarios, EvryThink makes it easy to see where you can stretch your runway and make the most of your resources.

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Disclaimer: NFA (Not Financial Advice) and DYOR (Do Your Own Research) are crucial reminders in the world of investing and business decisions. While tips and insights can be helpful, it's essential to independently verify information and assess risk based on your unique situation and goals. Remember, no one else fully understands your financial picture or risk tolerance, so always take time to research thoroughly before making any commitments.