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in a business , what is the cash burn rate ?
every business needs capital / money to operate
there are fixed expenses every month
- rent of the premises
- utilities ( electricity / water bills )
- salaries of the employees
- other operating expenses – raw material , etc
you add up all these expenses , and you will get your cash burn rate
the higher the reserves ( a good multiple of cash burn rate ) , the better position your business is in.