From Burn to Earn: Fixing Your Burn Multiple in 60 Days
September 9,2025
Investors don’t just watch growth anymore—they watch efficiency. Your north-star metric: Burn Multiple.
Burn Multiple = Net Burn ÷ Net New ARR (Use Net New Gross Profit if you’re not pure SaaS.)
Elite: < 1.0
Good: 1.0–1.5
Watch: 1.5–2.0
Fix now: > 2.0
The good news: you can materially improve this number in 60 days without stalling growth. Here’s a practical, founder-friendly plan tuned for MENA/GCC startups.
Week 1–2: Measure and freeze scope
1) Establish the baseline
Last 3 months: Net Burn, Net New ARR (or gross profit), Burn Multiple by month.
Cash runway (months), by Base/Bear/Bull scenarios.
CAC by channel, payback, CM1/CM2.
2) Publish the rules of spend
Introduce a capital allocation ladder (must-have → growth engines → options → nice-to-haves).
Turn policies into workflows in your card/AP tool: thresholds, dual approvals, vendor onboarding.
3) Kill leakage
Pause auto-renewals, unused seats, overlapping tools.
Stop discounts that outlast promos; implement floor pricing.
4) Price & package sanity
Minimum price floors, remove zombie discounts, nudge to annual prepay with value-backed incentives.
Week 3–4: Pull cash forward, push cash out
5) Collections sprint
7/21/35-day dunning cadence with friendly friction (reminders, in-app banners, success-manager nudge).
Offer annual prepay swap: 1 month free OR premium feature unlock.
Add late-fee clause on new contracts; apply softly to chronic late payers.
6) Payables & vendor plays
Renegotiate payment terms (Net 45/60), add off-ramps (30-day cancellation + data export).
Consolidate tools at renewal; seek usage-based where variable.
7) Quote-to-Cash clean-up
Close gaps between CRM → billing → GL.
Ensure e-invoice/e-receipt totals reconcile to GL and cash—faster VAT refunds = extended runway.
Week 5–6: Fix unit economics (fast wins)
8) Channel pruning
Pause channels with payback > 12 months or negative CM1.
Reallocate to proven channels until payback < 9–10 months.
9) Expansion & retention
Push value-based add-ons; launch 2–3 land-and-expand plays for existing customers.
Target one churn driver this month (e.g., onboarding time); publish improvement.
10) Headcount discipline
Hire to leading indicators (SQO volume, activation, NPS), not hope.
Backfill only mission-critical roles; contract where seasonal.
Week 7–8: Package for the board (and your next round)
11) Reporting that changes decisions
Scorecard: ARR/MRR, Net Burn, Burn Multiple, runway, CM1/CM2.
Variance bridge: what moved vs last month (drivers and owners).
Actions: the if–then triggers you’re executing (pause X, double-down Y).
12) Lock the operating cadence
Monthly re-forecast with Base/Bear/Bull using the same drivers.
13-week cash model updated weekly; board pack sent 48 hours pre-meeting.
Quick levers ranked by speed vs impact
Immediate (days)
Cancel unused SaaS, reduce seats, remove zombie discounts.
Switch to annual prepay offers (with value add, not raw discount).
Enforce PO for commitments > $5k, require business-case link.
Near-term (weeks)
Vendor term extensions; consolidate contracts at renewal.
Dunning + collections workflow; deposits for bespoke work.
Price-floor rollout; packaging revisit for good-better-best.
Mid-term (1–2 months)
Channel mix shift to sub-10-month payback.
Retention lift via onboarding/activation fix.
Gross-margin lift: reprice COGS-heavy SKUs, renegotiate logistics.
Sample calculation (SaaS)
Month 0: Net Burn $400k, Net New ARR $150k → Burn Multiple = 2.67 (fix now).
After 60 days: Net Burn $320k (–20%), Net New ARR $220k (+47%) → Burn Multiple = 1.45 (good). What changed? Annual prepay offers (+$40k ARR), vendor terms + tool consolidation (–$60k burn), paused a 14‑month payback channel (reallocated to an 8‑month channel), raised floor price 7%.
Founder checklist (save this)
✔️ Baseline Burn Multiple + runway; publish a capital allocation ladder.
✔️ Rolling forecast + 13‑week cash model live; one owner.
✔️ Collections cadence + annual prepay offer in market.
✔️ Vendor terms extended; off‑ramps and data‑export in contracts.
✔️ Channel payback < 10 months; price floors enforced.
✔️ Board pack: scorecard, variance bridge, action triggers.
Final word
You don’t need a miracle quarter to improve efficiency. You need clarity, cadence, and a few high‑leverage plays. Nail those in 60 days and your Burn Multiple tells a better story—one investors want to fund.
Need a burn‑multiple sprint with templates (cash model, dunning, board pack)? E Advisory can stand it up in a week.
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