burn-rate

Vocabulary Word

Definition

'Burn-rate' measures how fast a company uses its cash reserves, especially startups. Think of it like the speed of a car burning through fuel. If it's too fast, the car (company) may run out of fuel (money) before reaching its destination.

Examples in Different Contexts

In the tech industry, especially during product development phases, burn-rate is crucial. A tech CEO might assert, 'We need to monitor our burn-rate closely while developing the beta version of our software.'

Practice Scenarios

Business

Scenario:

The company's financial health may be at risk with such a high expenditure rate. Their current revenue stream doesn't seem sustainable in the long run.

Response:

If we can reduce administrative costs and overheads, it might help bring our burn-rate to a more sustainable level.

Tech

Scenario:

This project is consuming resources at an alarming rate. We might need to consider scaling back some features to balance costs.

Response:

I agree. We should prioritize essential features and postpone additional features to control our burn-rate.