Burn rate 101: how fixed costs decide survival
The startups that survive long enough to win are usually the ones that kept fixed costs embarrassingly low at the start.
Burn rate is how much cash you spend each month beyond what you bring in. It's the clock every startup races. The lower your fixed costs, the slower that clock ticks — and the more chances you get to figure things out.
Fixed vs variable costs
- Fixed costs don't move with sales: office rent, full-time salaries, subscriptions. They're due even in a dead month.
- Variable costs scale with activity: shipping, payment fees, ad spend you can pause.
Office rent is the archetypal fixed cost — large, recurring and inflexible. That's exactly what you don't want a lot of when revenue is unpredictable.
Why low fixed costs win
Low fixed costs mean a longer runway on the same cash, more tolerance for slow months, and the freedom to pivot without a lease anchoring you. It's not glamorous, but survival rarely is.
A simple rule for early teams
Before committing to any recurring cost, ask: "Does this directly help me find product-market fit or reach customers?" An office usually doesn't — an address does, and that's cheap. Keep the rest variable for as long as you can.
Need this done for you?
Our in-house CA & CS team set up your virtual office, VPOB and GST end to end — ₹19,188/yr.
💬 Talk to our team View plans →Frequently asked questions
What is a healthy burn rate for an early startup?
There's no universal number, but the goal is enough runway (often 12–18 months) to hit your next milestone. Low fixed costs are the easiest lever to extend it.
Is office rent a fixed or variable cost?
Fixed. It's due regardless of revenue, which is why it's risky for pre-revenue teams.
How does a virtual office help burn rate?
It removes a large fixed cost (rent + deposit) while keeping the legal address you need, directly lowering monthly burn.
Get a free callback
Leave your details and our in-house CA & CS team will call you back — usually within a few business hours. No spam, no obligation.
- ✓ Free consultation on VPOB, APOB & GST
- ✓ Transparent pricing ₹19,188/yr
- ✓ Same-day document pack on most plans