Showing all 52 terms.
How much money you actually lose each month, after counting what customers paid you.
Add up everything that left the bank this month — wages, software, rent, the cost of delivering what you sold. Subtract everything that came in. What is left is net burn: the real hole. Gross burn ignores the money coming in, which is why it looks worse than reality; net burn is the number your bank balance actually follows.
Net Burn = Total Monthly Cash Outflows - Total Monthly Cash Inflows
Why it matters
This is the clock. Watch gross burn alone and you will panic early; count signed contracts as though the money already arrived and you will not panic until it is too late. Net burn counts only cash that moved.
Where BizzyRoad uses it
BizzyRoad calculates net burn on the Numbers page and in the Stress test, and refuses to report zero or an invented figure while cost items or revenue are unstated.
Everything that leaves your bank in a month, ignoring anything that comes in.
The worst-case number. If every customer vanished tomorrow and you changed nothing, this is what would still go out the door every 30 days: wages, rent, software, insurance, the lot.
Gross Burn = Payroll + Benefits + Software + Facilities + Marketing + COGS
Why it matters
It is the floor of what you have committed to. Anyone deciding whether you survive a bad quarter looks here first, because it is the part of your spending that does not care how sales went.
Where BizzyRoad uses it
The budget sums your stated monthly costs and payroll: that total is your gross burn. Runway nets your stated revenue against it, and refuses while revenue is unstated.
How many months you can keep going at the current rate before the money runs out.
Cash in the bank divided by what you lose each month. It is the honest answer to “how long have I got?”, and it is the deadline every plan is really measured against — whether that plan is shipping something, reaching the point where you stop losing money, or raising more.
Runway (Months) = Current Liquid Cash Reserves / Monthly Net Burn
Why it matters
The six-month line is BizzyRoad’s own setting, not an industry figure. The shorter the runway, the more you stop running the business and start raising money, from a position where everyone you ask can tell you are desperate. The terms you get then are the terms of someone with no other option.
Where BizzyRoad uses it
When cash is $0 and net burn is positive, BizzyRoad shows a runway of 0.0 rather than infinite or NaN. Six months or more reads Healthy (≥6.0 mo), beside the exact months. When revenue is more than burn there is no countdown and it reads Surplus / self-funding; when revenue exactly equals burn it reads Break-even.
The runway line below which BizzyRoad marks a venture critical: under three and a half months of money left.
The 3.5-month line is BizzyRoad’s own setting, not an industry figure: it marks the point where a raise or a cut started today has little room to land before the money runs out, so every choice is made against that deadline. From 3.5 up to 6 months the runway is a warning; at 6 months or more, 6.0 included, BizzyRoad labels it Healthy (≥6.0 mo).
Also called: Critical Barrier (Thornton Matrix)
Critical when Cash Reserves / Monthly Net Burn < 3.5 months
Why it matters
Past this line the question stops being how to grow and becomes how to reach the next quarter, and every investor you ask can see it.
Where BizzyRoad uses it
The Numbers page, the Stress test and Ask Thornton read CRITICAL below 3.5 months of runway and WARNING from 3.5 up to 6.0, from your stated cash and revenue and priced burn. The cash chart draws the edge as the 3.5-month line.
More money comes in each month than goes out. The bank balance grows on its own.
Net burn has gone negative, which here is good: you are not burning, you are accumulating. The company funds itself, and you add to the balance every month without selling a slice of it to anybody. Money in exactly equal to money out is break-even, not a surplus: nothing is added.
Also called: Sovereign Surplus (Thornton Matrix)
Surplus = Monthly Cash Inflows - Fully Burdened Cash Outflows, only when above 0
Why it matters
Nobody can run you out of money, and every investor conversation is now one you can walk away from.
Where BizzyRoad uses it
When stated monthly revenue is more than priced burn, BizzyRoad labels the runway Surplus / self-funding and stops counting down to a cash-out date. When the two are exactly equal it reads Break-even instead: zero net burn is not a surplus.
The actual date on the calendar when you run out of money, if nothing changes.
Not a feeling, a date. Every plan you have is really a bet that it finishes before this day — and anything that takes time to land, like a raise, has to finish before it, so the real deadline is earlier than the one on the calendar.
Cash-Out Date = Today + (Cash Reserves / Monthly Net Burn) months
Why it matters
Teams think in vague terms — "sometime next summer". A specific date, November 14 2026, changes the conversation: every new hire and every new subscription is now measured against how much of that date it moves.
Where BizzyRoad uses it
The Numbers page shows runway in months; count forward from today for the date.
Working out, in advance, what a sudden loss of revenue does to you — and exactly what you would cut.
The shock is the bad news: a recession, your biggest customer leaving, a promised cheque that never arrives. The cost cuts are the list you write BEFORE any of that happens — which costs and which roles you would cut, in what order, to get back to a runway you have chosen in advance.
Also called: Operating Amputation (Thornton Matrix)
Post-Shock Runway = Cash Reserves / (Base Burn + Shock Burn - Cut Costs)
Why it matters
In a crisis nobody thinks clearly, and the hesitation is what kills the company, not the cut. Deciding the order on a calm day is the whole point.
Where BizzyRoad uses it
The Stress test on the Numbers page applies a revenue shock and burn drift to your stated figures; the AI stress-test audit then proposes two to five cost cuts, each with the runway days it would buy.
⚡ Thornton Matrix & Spending Money spent on the things that actually make the business worth more: the product, and getting customers.
Every dollar that leaves a mark: building the thing you sell, the work only you can do, the channels that reliably bring customers, and delivering to the customers you already have. Spend here and the business is worth more afterwards than before.
Also called: Kinetic Capital (Thornton Matrix)
Growth-category spend = AI & Compute + Payroll & Contractors + Marketing & Growth + Inventory & Supplies + Cost of Goods + builder tools under Software & Subscriptions
Why it matters
The companies that pull away are not the ones that spend more. They are the ones where a larger share of what they spend lands here rather than on everything else.
Where BizzyRoad uses it
Books sorts each imported bank outflow by its category: AI & Compute, Payroll & Contractors, Marketing & Growth, Inventory & Supplies, Cost of Goods and builder tools (GitHub, Vercel, AWS and the like) are growth-category spend; every other known category is other categorized spend. It shows growth-category spend as a share of the two.
⚡ Thornton Matrix & Spending Categorized spend outside the growth categories: rent, fees, admin, legal, fuel, insurance, utilities and non-builder software.
Some of it is necessary — rent, insurance, the accountant. Some of it is where waste hides: duplicate software nobody cancelled, agencies on retainer that report to no one. None of it builds the product or brings a customer, which is why it is worth reading line by line. It is not the same as running costs: payroll counts as growth-category spend.
Also called: Friction Capital (Thornton Matrix)
Other categorized spend = Categorized outflows - Growth-category spend
Why it matters
Every dollar here that nobody needs is runway that could have gone to the product or to winning customers.
Where BizzyRoad uses it
Books puts every outflow in a known category that is not a growth category here; uncategorized outflows are in neither side. Repeat charges, in Books, flags vendors you have paid more than once, their cadence where they have one, and a price rise of more than 5% and at least $5. Whether anyone still uses the tool is your call; the ledger cannot see that.
⚡ Thornton Matrix & Spending Of every dollar you spend, how much goes into the product and into winning customers.
One number for how disciplined your spending is. The higher it is, the more of every dollar goes into the product or into sales rather than into everything else.
Also called: Kinetic Capital Ratio, KCR (Thornton Matrix)
Growth-category share = Growth-category spend / (Growth-category spend + Other categorized spend)
Why it matters
It is hard to flatter. A board can read this faster than a revenue chart, because revenue can be bought and this cannot.
Where BizzyRoad uses it
Books computes it from your imported statements, over categorized spend only, and reads it back in three bands: at 70% or above, most of your money is reaching the product; from 50%, the balance is holding; below 50%, it says so plainly and points you at the other categorized spend. While more than half of your outflow is uncategorized it is not scored.
⚡ Thornton Matrix & Spending A four-box chart: how your revenue compares with your burn, against how hard you are to copy.
Two measures, four boxes. Revenue ÷ burn (Vc) — your stated monthly revenue divided by your priced monthly burn, so 1.0 means revenue covers burn exactly. Defensibility score (Ω) — a weighted score from five factors you state, for how hard it would be for someone else to do what you do. High on both is The Flywheel; hard to copy but low revenue ÷ burn is The Fortress; high revenue ÷ burn but easy to copy is The Crucible; low on both is The Anchor Drag. On the live tile on your Numbers page and in the exported report alike, the defensibility score runs left to right and revenue ÷ burn runs bottom to top.
Also called: The Thornton Quadrant (Thornton Matrix)
Why it matters
It tells you which problem you actually have. A Crucible is the square with the higher revenue ÷ burn and the easier-to-copy work, so it needs something that keeps competitors out before they arrive. An Anchor Drag is the square with the lower revenue ÷ burn and the easier-to-copy work, so it needs fixing or dropping. And it sorts the parts of a business separately, so the answer is rarely “the company” — it is one product line, one channel, one shift.
Where BizzyRoad uses it
The Numbers page plots your live position from your stated revenue, priced burn and five stated defensibility factors, and refuses to plot one at all until all five are stated — a guessed score parks you in the stickiest square on the grid and then keeps it as history.
⚡ Thornton Matrix & Spending Six months or more of money left at the current net burn — exactly 6.0 months counts.
BizzyRoad sorts runway into three bands: under 3.5 months is critical, 3.5 up to 6 months is a warning, and 6 months or more is healthy. The cash chart draws the edge as the 6-month line.
Also called: Sovereign Runway (Thornton Matrix)
Healthy when Cash Reserves / Monthly Net Burn >= 6.0
Why it matters
Six months is BizzyRoad’s own line, not an industry figure. The more runway you have, the more you can run the business instead of raising money under pressure; the less, the more every conversation with an investor starts on their terms.
Where BizzyRoad uses it
The Numbers page, the Stress test and the investor deck read HEALTHY RUNWAY (≥6.0 MO) at 6.0 months or more, beside the exact months, from your stated cash and revenue and priced burn. When revenue covers burn there is no countdown at all: more revenue than burn reads Surplus / self-funding, and exactly equal reads Break-even.
⚡ Thornton Matrix & Spending If one thing goes wrong, how much of the business goes with it.
A measure of how much rests on one thread. What happens to your runway if the cloud credits stop, if the one big pilot cancels, if the single supplier raises prices? If the answer is “everything”, you have found the thread to cut.
Blast Radius = Δ Months Runway Lost + Emergency Cost Cuts Required
Why it matters
Allows founders to de-risk vulnerabilities long before they materialize into board-level emergencies.
Where BizzyRoad uses it
The Simulator tab on the Books page shows the runway a proposed expense costs; the Stress test on the Numbers page applies a revenue shock and burn drift.
⚡ Thornton Matrix & Spending A rating is harder to gain than to keep, so it stops flickering week to week.
A thermostat does not switch the heating on and off every time the temperature wobbles by a hair; it waits for a real change. Same idea, same name — hysteresis. A first reading, with no square yet, cuts the defensibility score at 0.5. After that, a venture in the high-defensibility half keeps it until the score drops below 0.48, and a venture in the low half joins it only at 0.52. The gap between the two numbers is what stops the dashboard changing its mind every Monday.
Also called: Hysteresis Moat (Thornton Matrix)
Why it matters
So when the dashboard says something changed, something actually changed.
Where BizzyRoad uses it
Applied when the Numbers page places your quadrant: a first reading cuts at Ω 0.5 and Vc 1.0; after that, Ω 0.52/0.48 and Vc 1.05/0.95.
⚡ Thornton Matrix & Spending Flags vendors you have paid more than once, and a price rise of more than 5% and at least $5.
Young companies leak money on seats for people who left, keys nobody calls any more, and tools that renew themselves every year. Repeat charges reads your ledger for vendors you have paid more than once, names their cadence where they have one, and flags a price rise of more than 5% and at least $5; it cannot see whether anyone uses the tool, so that call stays yours.
Earlier name: Watchdog Leak
Why it matters
Every dollar reclaimed from unused software lowers your monthly burn and extends runway, without touching payroll or cutting growth initiatives.
Where BizzyRoad uses it
Repeat charges, in Books: each recurring charge with its cadence, and a flag when one rises more than 5% and at least $5.
⚡ Thornton Matrix & Spending A four-box chart that places a venture by its defensibility score and its revenue ÷ burn.
A framework by Michael J. Thornton. It scores a venture on two things the founder states: how hard it is to copy (the defensibility score, Ω, from five factors) and how its monthly revenue compares with its monthly burn (revenue ÷ burn, Vc). The two scores place it in one of four named quadrants — The Flywheel, The Fortress, The Crucible and The Anchor Drag. The Revenue-to-burn vs. defensibility chart entry walks through the chart itself.
Also called: Thornton Matrix
Why it matters
It names which problem you have before you spend on the wrong fix: a business anyone can copy needs something different from one whose revenue does not yet cover its burn.
Where BizzyRoad uses it
The Numbers page places your venture from your stated revenue, priced burn and five stated defensibility factors, and places nothing while any of them is missing. The PDF and HTML exports print the same square.
⚡ Thornton Matrix & Spending A score from 0 to 1 for how hard your business is to copy, from five factors you state.
Five factors, each scored from 0 to 1 and weighted: customers locked in by contract 25%, what you own outright 25%, reaching customers without a middleman 20%, how hard it is for customers to leave 15% and a hard-to-copy advantage 15%. The weighted sum is the score. It runs left to right on the Thornton Matrix: a first reading at 0.5 or more places you in the hard-to-copy (right) half; after that you keep that place until the score falls below 0.48, and reach it from the left only at 0.52.
Also called: Sovereign Defensibility (Thornton Matrix)
Ω = 0.25 x Lock-in + 0.25 x Owned IP + 0.20 x Platform Independence + 0.15 x Switching Cost + 0.15 x Proprietary Moat
Why it matters
A business anyone can copy ends up competing on price, and a price is the easiest thing for a rival to match.
Where BizzyRoad uses it
The score stays empty until all five factors are stated — BizzyRoad never fills a missing one with a guess, so the Numbers page places no quadrant without it. The Competitor Scan can propose factor scores from rivals’ pages for you to confirm.
Bookkeeping where every transaction is written down twice, so the two halves have to agree.
Every movement of money touches two accounts: one loses, one gains. Buy software with cash and the cash account goes down by exactly what the software expense goes up by. Because the two sides must match, a mistake cannot hide — the books simply refuse to balance. This is the 500-year-old rule all accounting rests on.
Total Debits ≡ Total Credits | Assets = Liabilities + Equity
Why it matters
A spreadsheet that just lists payments lets a dollar go missing with nothing to notice. Writing it twice means something always notices.
Where BizzyRoad uses it
Books is not a double-entry system: it keeps a categorized ledger of your bank statements, one signed amount per transaction. Your accountant’s books are where debits and credits balance.
Do you count a sale when you do the work, or when the money actually lands? Those are the two methods.
Cash accounting logs money only when it enters or leaves the bank account. Accrual accounting matches revenue to the period delivery occurs and expenses to when they are incurred. An annual $120k contract paid upfront is $120k in cash today, but only $10k/month in accrued revenue.
Why it matters
Founders who operate solely on cash basis mistake upfront customer prepayments for profit and spend themselves into insolvency before fulfilling the contract.
Where BizzyRoad uses it
Books shows the cash view: money as it entered or left the bank. It does not keep an accrual schedule; that lives in your accountant’s books.
Getting your transactions in and matched without depending on a bank connection that keeps breaking.
Services that plug into your bank for you — Plaid, QuickBooks and the like — break constantly: the login expires, the bank asks for a code nobody sees, the connection goes down for maintenance. Synthetic Sync lets you drop in a statement you exported yourself (CSV, OFX, QBO or QFX) and adds it to your ledger, skipping rows you already imported.
Earlier name: Synthetic Sync
Why it matters
Your books never go dark the morning of a pitch because someone else’s service is having a bad day.
Where BizzyRoad uses it
Built into Books, so nothing you need depends on a third party staying up.
A permanent record of every change, which nobody can quietly go back and rewrite.
Sooner or later somebody serious reads your books: a tax office, an auditor, or the team checking you over before they buy you. An audit trail that cannot be edited is what proves the numbers you are showing today are the numbers you recorded back then.
Why it matters
If a buyer finds books that were tidied up after the fact, the price drops or the deal dies. Not because of the amounts — because of the tidying.
Where BizzyRoad uses it
Most workspace changes and every Checkpoints restore are logged with a timestamp; category edits, decisions and drafts are not. An import is logged as one event, deleting an import removes its rows, and a log write that fails does not stop the change.
COGS is what each sale costs you to deliver. OpEx is what the company costs to run whether you sell or not.
Cost of Goods Sold — COGS — is the part that scales with sales: servers, the AI calls a customer’s request makes, the card fee on their payment, the support they need. Operating Expenses — OpEx — is the rest: salaries, rent, lawyers, your own pay. The line between them is what makes gross margin mean anything.
Gross Margin % = ((Revenue - COGS) / Revenue) * 100
Why it matters
Put your AI bill in the wrong column and your gross margin looks better than it is — which is exactly the number everyone uses to judge whether the business gets more profitable as it grows.
Where BizzyRoad uses it
Books sorts bank spending into categories, not into cost of goods and operating expense, and it does not compute gross margin. That split lives in your accountant’s books.
The money you can actually reach right now to cover the bills that are due soon.
What you own that turns into cash within a year, minus what you owe within a year. Positive means you can pay what is coming without borrowing in a hurry. See also Negative Working Capital, which sounds worse and is often better.
Working Capital = Current Assets - Current Liabilities
Why it matters
You can be profitable on paper and still miss payroll, because big customers pay on their schedule and your staff are paid on yours.
Where BizzyRoad uses it
Books reads bank statements, not invoices, so it does not track receivables or collection lag.
📐 Unit Economics & Efficiency Everything you spend to win one paying customer, divided by how many you won.
Add up everything spent on getting customers in a period — ads, marketing software, the salaries of everyone selling, their commission, their travel — and divide by how many new customers actually signed. Not just the ad bill: the people count too.
CAC = Total Sales & Marketing Spend / Number of New Customers Acquired
Why it matters
If winning a customer costs more than they will ever pay you, or takes so long to earn back that your cash runs out first, then hiring more salespeople makes you fail faster, not slower.
Where BizzyRoad uses it
BizzyRoad does not compute CAC; note it in the Lean Canvas Cost Structure box.
📐 Unit Economics & Efficiency What one customer is worth to you in total, after delivery costs, before they leave.
How much a typical customer pays you across their whole time with you, counting only the part you keep after the cost of serving them. Three numbers go in: what they pay per month (ARPA, average revenue per account), how much of that you keep (gross margin), and how fast customers leave (churn).
LTV = (ARPA * Gross Margin %) / Customer Churn Rate
Why it matters
Demonstrates the compounding economic value of your customer base and determines how much you can aggressively spend on CAC.
Where BizzyRoad uses it
BizzyRoad does not compute LTV.
📐 Unit Economics & Efficiency How many times over a customer pays back what it cost to win them.
A ratio near 1 means each customer only pays back what it cost to win them, with nothing left for the rest of the business. The higher it is, the more each acquisition dollar returns; a very high ratio can also mean you are under-investing in acquisition.
LTV:CAC = Lifetime Value / Customer Acquisition Cost
Why it matters
If a customer is worth little more than it cost to win them, growth is just a faster way to spend. BizzyRoad does not set a target ratio for you.
Where BizzyRoad uses it
The investor deck does not include LTV:CAC.
📐 Unit Economics & Efficiency How many months a customer takes to pay back what it cost to win them.
This sets how fast the same dollar can be used again. Earn it back in six months and you can spend it on the next customer twice a year. Take twenty-four months and every new customer ties up your cash for two years before it comes back.
CAC Payback (Months) = CAC / (Monthly ARPA * Gross Margin %)
Why it matters
The shorter the payback, the sooner each customer’s cash can fund the next one. A long payback ties up cash in acquisition before it returns.
Where BizzyRoad uses it
Scenarios models hires and revenue growth, not CAC payback.
📐 Unit Economics & Efficiency For every dollar you spent on sales last quarter, how much new yearly revenue did it bring?
Take how much your revenue grew this quarter, multiply by four to put it in yearly terms, and divide by what you spent on sales and marketing LAST quarter — last quarter, because that is the spending this quarter’s growth came from. The higher it is, the more growth each sales and marketing dollar bought; BizzyRoad sets no pass mark for it.
Magic Number = (Quarter Revenue Q(n) - Revenue Q(n-1)) * 4 / S&M Spend Q(n-1)
Why it matters
It answers the only question that matters before you raise the marketing budget: does spending more here actually produce more?
Where BizzyRoad uses it
BizzyRoad does not compute the Magic Number.
📐 Unit Economics & Efficiency What last year’s customers are worth this year — after upgrades, downgrades and the ones who left.
Ignore every new customer and look only at the ones you already had. If they collectively pay you more this year than last, you are above 100%. At 120% the business grows a fifth every year even if you never sign anyone new again, because upgrades outweigh cancellations.
NDR % = (Starting ARR + Expansions - Contractions - Churn) / Starting ARR * 100
Why it matters
Well above 100% is strong evidence that people genuinely need the thing — they are choosing to buy more of it — and it is what makes a software company expensive to buy.
Where BizzyRoad uses it
Scenarios applies one revenue growth rate; it does not separate existing-customer expansion.
🏛️ Capital, Equity & Governance Your slice of the company gets smaller every time new shares are handed out.
Your share count does not change when you raise money — everyone else’s does, so your percentage falls. That is dilution, and the same happens when shares are set aside for staff. The waterfall is the separate question of who gets paid in what order if the company is ever sold; it decides how much your percentage is actually worth.
Post-Financing Ownership % = Pre-Financing Shares / Total Post-Financing Diluted Shares
Why it matters
Careless early fundraising on un-modeled SAFEs with varying valuation caps can dilute founders down to minority stakes before Series A.
Where BizzyRoad uses it
The roadmap’s Capital required panel compounds priced raises into the founder share retained.
🏛️ Capital, Equity & Governance A SAFE is a promise of shares later. A priced round hands over the shares now, at an agreed price.
A SAFE is a contractual right to receive shares in a future priced financing round at a discount or valuation cap. A Priced Round establishes a formal per-share price, amends corporate charter documents, and issues Series Seed or Series A Preferred Stock.
Why it matters
SAFEs are quick and cheap to paper, which is why founders sign several. The catch is that nobody counts the shares until they all convert at once, and the total is regularly far more than the founder expected.
Where BizzyRoad uses it
Models priced rounds only; SAFEs are not modeled.
🏛️ Capital, Equity & Governance Investors get their money back first when the company is sold. Founders and staff split whatever is left.
When the company sells, investors take their agreed amount off the top — a multiple of what they put in, set in the term sheet (“1x” is one times the investment). Only then is anything divided among the ordinary shares that founders and employees hold. “Participating” means they take their money back AND their percentage of the rest.
Why it matters
If you raise $10M on a 1x preference and sell the business for $9M, preferred investors take all $9M—leaving founders with exactly $0 despite owning 70% on paper.
Where BizzyRoad uses it
Not modeled in BizzyRoad.
🏛️ Capital, Equity & Governance What a hire really costs you — not their salary, but salary plus everything attached to it.
A software engineer with a stated salary of $130,000/year does not cost $10,833/month. With employer payroll taxes (FICA/FUTA), health insurance, 401(k) match, workers comp, and laptop/software licensing, the fully-burdened cost is higher than the salary alone — by your own benefits rate, which BizzyRoad does not assume. Contractors (1099), conversely, do not carry employer benefits burden.
Burdened Compensation = Base Salary * (1 + Benefits_Rate_Pct / 100)
Why it matters
Budget the salary alone and every hire costs more than your plan says. Do that across a team and you have quietly deleted months of runway.
Where BizzyRoad uses it
Team & Payroll adds the extra costs on top of salaried employees automatically, and leaves contractors alone — you do not pay a contractor’s taxes or benefits, which is the whole difference between the two.
🏛️ Capital, Equity & Governance Stops two people claiming the same task at the same moment and both being told yes.
Two advisors open the same request and both hit Claim in the same second. Without a lock, the software can tell both of them they got it. A lock makes the database hand it to exactly one and tell the other the truth.
Why it matters
Prevents double-commitments, duplicated bounty payouts, and embarrassing stakeholder communication clashes.
Where BizzyRoad uses it
Underpins The Asks Board, using PostgreSQL advisory locks (`pg_advisory_xact_lock`) to resolve concurrent claims atomically.
🏛️ Capital, Equity & Governance An investor’s right to put in more money later, just to keep the same percentage they already have.
Pro rata rights allow early investors to invest additional capital in subsequent rounds so their ownership stake is not diluted. For example, an investor owning 10% has the right to buy 10% of the new shares issued in the Series A.
Why it matters
Major venture funds rely heavily on pro rata rights to concentrate capital into their fastest-growing portfolio companies.
Where BizzyRoad uses it
Not modeled in BizzyRoad.
📐 Unit Economics & Efficiency The revenue that arrives again next month without anyone selling anything.
MRR is Monthly Recurring Revenue — what your subscribers together pay you in a month. ARR is that same figure stated for a year, so $25,000 MRR is $300,000 ARR. It deliberately excludes one-off work: a $50,000 consulting project is revenue, but it is not recurring, and counting it as ARR is the most common way founders overstate the size of their business.
ARR = MRR x 12 · MRR = sum of all active subscriptions, normalised to a month
Why it matters
Recurring revenue is what makes a company worth a multiple of its sales rather than a multiple of its profit. It is also the only revenue you can plan against, because it arrives whether or not you sell this month.
Where BizzyRoad uses it
Scenarios and the deck use the one monthly revenue you state; keep one-off income out of it.
📐 Unit Economics & Efficiency The share of customers, or of revenue, that leaves in a given month.
Count how many customers you had at the start of the month and how many of them were gone by the end. That percentage is churn. Revenue churn is the same sum in dollars, and it can differ sharply — losing one large account and ten tiny ones are very different events that customer churn alone will not tell apart.
Churn % = Customers Lost in Period / Customers at Start of Period x 100
Why it matters
Churn sets the ceiling on your size. At 5% monthly churn the average customer stays twenty months, so no matter how many you win, the business stops growing at the point where new sign-ups only replace the ones walking out.
Where BizzyRoad uses it
BizzyRoad has no churn input; model it as a revenue shock or negative growth in Scenarios.
The point where money coming in exactly covers money going out. Nothing gained, nothing lost.
The line between burning cash and making it. Below breakeven your runway is counting down; above it, it is not. Be careful which breakeven anyone means: covering just the direct cost of each sale is a much lower bar than covering the whole company, salaries and rent included.
Breakeven Revenue = Fixed Costs / Gross Margin %
Why it matters
Reaching breakeven is what turns raising money into a choice. Until then, someone else decides whether your company continues.
Where BizzyRoad uses it
Scenarios marks the month each lane breaks even: the first month its revenue minus burn, summed from today, reaches zero.
⚡ Thornton Matrix & Spending Higher revenue ÷ burn, harder to copy: the square with the higher revenue ÷ burn and the harder-to-copy work.
The best box to be in. “Higher revenue ÷ burn” describes the square, measured by your stated monthly revenue divided by your priced monthly burn. “Harder to copy” describes the square, measured by the defensibility score (Ω) from your five stated factors, where a competitor cannot easily reproduce what you sell. Where each cut sits, and how a square is kept across it: A first reading puts revenue ÷ burn in the higher half at 1.0 or above. After that, a venture in the higher half stays there until its ratio falls below 0.95, and a venture in the lower half joins it only at 1.05 or above. The defensibility score works the same way: a first reading puts it in the higher half at 0.5 or above, the higher half stays there until it falls below 0.48, and the lower half joins it only at 0.52 or above. Between those edges a venture keeps its square, and the Numbers page says so beside it.
Also called: The Flywheel (Thornton Matrix)
Why it matters
The Flywheel is the square the other three are trying to reach: higher revenue ÷ burn and harder to copy at once.
Where BizzyRoad uses it
Your Numbers page plots your live position here from your stated figures; the home page shows the same four boxes worked through on example businesses.
⚡ Thornton Matrix & Spending Harder to copy, lower revenue ÷ burn: the square for work others cannot easily replace, with the lower revenue ÷ burn.
“Harder to copy” describes the square, measured by the defensibility score (Ω) from your five stated factors, where a competitor cannot easily do what you do. “Lower revenue ÷ burn” describes the square, measured by your stated monthly revenue divided by your priced monthly burn. Where each cut sits, and how a square is kept across it: A first reading puts revenue ÷ burn in the higher half at 1.0 or above. After that, a venture in the higher half stays there until its ratio falls below 0.95, and a venture in the lower half joins it only at 1.05 or above. The defensibility score works the same way: a first reading puts it in the higher half at 0.5 or above, the higher half stays there until it falls below 0.48, and the lower half joins it only at 0.52 or above. Between those edges a venture keeps its square, and the Numbers page says so beside it.
Also called: The Fortress (Thornton Matrix)
Why it matters
A Fortress is worth protecting. Its square is defined by the lower revenue ÷ burn, so the lever is revenue and burn — not rebuilding what already keeps competitors out.
Where BizzyRoad uses it
The Numbers page places a venture here from its stated revenue, priced burn and five stated defensibility factors, by the band above. The runway beside it says how long the cash lasts.
⚡ Thornton Matrix & Spending Higher revenue ÷ burn, easier to copy: the square with the higher revenue ÷ burn and work a competitor could copy tomorrow.
“Higher revenue ÷ burn” describes the square, measured by your stated monthly revenue divided by your priced monthly burn. “Easier to copy” describes the square, measured by the defensibility score (Ω) from your five stated factors, where little stops a competitor doing the same thing. Where each cut sits, and how a square is kept across it: A first reading puts revenue ÷ burn in the higher half at 1.0 or above. After that, a venture in the higher half stays there until its ratio falls below 0.95, and a venture in the lower half joins it only at 1.05 or above. The defensibility score works the same way: a first reading puts it in the higher half at 0.5 or above, the higher half stays there until it falls below 0.48, and the lower half joins it only at 0.52 or above. Between those edges a venture keeps its square, and the Numbers page says so beside it.
Also called: The Crucible (Thornton Matrix)
Why it matters
A Crucible is exposed to copying. Its square is defined by the easier-to-copy work, so the lever is what makes you harder to copy — contracts, owned work, customers who would lose something by leaving.
Where BizzyRoad uses it
The Numbers page places a venture here from its stated revenue, priced burn and five stated defensibility factors, by the band above. A competitor scan proposes those scores from rival pages for you to confirm.
⚡ Thornton Matrix & Spending Lower revenue ÷ burn, easier to copy: the square with the lower revenue ÷ burn and the easier-to-copy work.
The worst box. “Lower revenue ÷ burn” describes the square, measured by your stated monthly revenue divided by your priced monthly burn. “Easier to copy” describes the square, measured by the defensibility score (Ω) from your five stated factors, where nothing protects it either. Where each cut sits, and how a square is kept across it: A first reading puts revenue ÷ burn in the higher half at 1.0 or above. After that, a venture in the higher half stays there until its ratio falls below 0.95, and a venture in the lower half joins it only at 1.05 or above. The defensibility score works the same way: a first reading puts it in the higher half at 0.5 or above, the higher half stays there until it falls below 0.48, and the lower half joins it only at 0.52 or above. Between those edges a venture keeps its square, and the Numbers page says so beside it. It usually survives because it feels like real work and because it once made sense.
Also called: The Anchor Drag (Thornton Matrix)
Why it matters
An Anchor Drag rarely announces itself. It hides behind the phrase “steady business” and quietly sets the ceiling on everything else.
Where BizzyRoad uses it
In the worked example on the home page, seven-minute pour-overs during the morning rush are the Anchor Drag — they stall the register every other sale has to pass through.
📐 Unit Economics & Efficiency How many cents of each sales dollar are left after the direct cost of making the thing.
Take what the customer paid, subtract only what it cost you to make and deliver that specific item — beans, packaging, shipping, the server time — and what is left is gross margin. It does NOT subtract rent, salaries or software; those come out later. A $24 bag of coffee with $6 of beans and packaging has a 75% gross margin: $18 of every $24.
Gross Margin % = (Revenue - Cost of Goods Sold) / Revenue
Why it matters
Gross margin is the ceiling on everything. A business with a 20% gross margin has to sell five times as much as one at 100% to cover the same rent.
Where BizzyRoad uses it
Books does not report gross margin; it has no cost-of-goods category. Your accountant’s profit and loss statement does.
📐 Unit Economics & Efficiency What the business earns before interest, tax, and wear-and-tear on what it owns.
Earnings Before Interest, Taxes, Depreciation and Amortization. It is an attempt to show what the operation itself earns, with the financing decisions and the accounting for aging equipment stripped out, so two businesses can be compared on how they run rather than on how they borrowed. It is not cash — a company can post positive EBITDA and still be unable to make payroll.
EBITDA = Operating Profit + Depreciation + Amortization
Why it matters
Buyers and lenders quote EBITDA constantly. Knowing what it leaves out is how you avoid being sold a number that ignores the loan you still have to repay.
Where BizzyRoad uses it
BizzyRoad reports cash — stated cash, burn and runway — not profit or EBITDA, precisely because those can look healthy while the bank balance is falling.
Selling to other businesses rather than to individual people.
Your customer is a company. Orders are larger and less frequent, the buyer is usually spending someone else’s budget, and the relationship tends to run on a contract or a standing order rather than a moment of impulse. Fewer customers, bigger cheques, longer sales cycles, and far lower churn once you are in.
Why it matters
Twelve B2B accounts paying monthly can be steadier than a thousand individual buyers, and they cost far less to keep.
Where BizzyRoad uses it
The homepage case study contrasts a café’s B2B office accounts with its walk-in counter trade.
Selling straight to the person who uses the thing, with no shop or distributor in between.
You own the transaction and the customer relationship end to end — their email, their address, their reorder date. Nobody takes a cut, and nobody stands between you and the person paying. The trade-off is that you also own marketing, shipping, returns and support.
Why it matters
DTC is where a margin that a retailer would have taken stays with you, and where a customer list becomes an asset you actually own.
Where BizzyRoad uses it
The homepage case study uses a weekly coffee bag subscription as the DTC example: billed automatically, no counter staff involved.
Whatever makes it hard or slow for someone else to do what you do.
A moat is not a better product; it is a reason a competitor cannot simply copy you next quarter. Real ones look like: contracts with switching costs, a catalog or dataset you own outright, a license others cannot get, a brand people ask for by name, or a network that gets more useful with every user. A low price is not a moat — anyone can match a price.
Why it matters
Without a moat, every gain you make is temporary. The homepage case study marks conventional advice “0% moat” because it produces results anyone can copy.
Where BizzyRoad uses it
The Competitor Scan proposes defensibility scores from rivals’ pages for you to confirm; see also Hysteresis Moat for the maths that stops the rating flickering.
A seller with no say in the price — you take what the market quotes or you do not sell.
When what you sell is identical to what everyone else sells, the buyer sets the price and you accept it. Commodity grain, plain pallet storage, generic freight. The costs are yours alone but the price is not, so a small move in the market can wipe out a whole year of work.
Why it matters
Getting off price-taker ground — by contract, by specialty, by owning the customer — is usually worth more than any cost cut.
Where BizzyRoad uses it
Two of the homepage case studies are price-taker businesses being moved onto contracted, specified work.
The customer pays for the capacity they reserved whether or not they use it.
You set aside space, acreage or production for a customer, and they commit to paying for it either way. Common in warehousing, energy, and contracted farming. It moves the risk of a quiet quarter from you to them, which is why it is priced lower per unit than spot work.
Why it matters
A take-or-pay contract turns a variable business into a predictable one, and a bank will lend against it in a way it will not lend against hope.
Where BizzyRoad uses it
Two homepage case studies use take-or-pay contracts as the Fortress quadrant — the floor everything else stands on.
Your customers pay you before your own bills come due, so growth funds itself.
Normally the phrase sounds like trouble, and for a business that has simply run out of money it is. But when it comes from the order of payments — the subscriber is charged on the 1st, you buy the beans on the 10th, the roaster invoices you on the 30th — it is the opposite of trouble. Every new customer hands you cash before costing you any.
Working Capital = Current Assets - Current Liabilities (negative by payment TIMING, not by insolvency)
Why it matters
It is the difference between growth you have to finance and growth that finances itself. Subscriptions and prepayment are the usual ways to get there.
Where BizzyRoad uses it
Books shows money in and out of the bank by month; it does not track invoice or bill due dates, so this gap is yours to watch.
Top line is everything that came in. Bottom line is what is still there after it all went back out.
They are named for where they sit on an income statement: revenue at the top, profit at the bottom. A farm can post $900,000 on the top line and lose money on the bottom line in the same year. When someone quotes a number without saying which line it is, assume it is the top one.
Why it matters
Almost every impressive business figure you will hear quoted is a top-line number. The bottom line is the one that pays you.
Where BizzyRoad uses it
Books reports money in and money out of the bank, not revenue or profit as an accountant books them, and the Numbers page leads with cash.
A snapshot of what you own, what you owe, and what is left over — on one specific day.
Unlike a profit statement, which covers a stretch of time, a balance sheet is a single moment. Assets on one side, liabilities on the other, and the difference is yours. Things you own outright — a music catalog, a building, a customer list — sit here and keep sitting here, which is why owning beats renting over a long enough horizon.
Assets = Liabilities + Equity
Why it matters
Profit tells you how a year went. The balance sheet tells you what you have actually built.
Where BizzyRoad uses it
Books does not produce a balance sheet: it categorizes bank transactions. The balance sheet comes from your accountant’s double-entry books.
