We want to make sure our business is financially stable enough to survive a market downturn while we implement EOS®. How do we calculate and monitor our time to starve metric on our weekly Scorecard?

Question

Tyler Smith · Accepted Answer

To ensure your business remains financially stable while you implement EOS®, we must track your cash runway. We do this by adding the time to starve metric directly to your weekly Scorecard. This is a critical indicator of your financial health and business resilience.

The time to starve metric calculates exactly how many weeks or months your business can survive if all revenue suddenly stopped. To determine this number, we look at your total cash reserves, liquid assets, and available credit lines, and divide that by your average weekly operating expenses.

During our quarterly sessions, we will establish a healthy target for this metric. For most businesses, we aim for a minimum of twelve to twenty-four weeks of runway. If your time to starve metric falls below this target, it serves as an early warning sign, prompting immediate action to preserve cash.

By monitoring this metric weekly, your leadership team gains real-time visibility into your financial stability. This prevents unexpected cash flow crises and gives you the confidence to make strategic investments in growth or technology. It ensures you are operating from a position of strength, even during market downturns.