Cash flow runway for an eCommerce store refers to the amount of time that the store can continue to operate without running out of cash, based on the current rate of cash inflows and outflows.
In other words, it is a measure of the number of months or weeks that the store can continue to pay its bills, cover its expenses, and invest in growth initiatives, before it runs out of cash. This calculation is important because it gives the store owners an idea of how long they have to make adjustments to their business strategy, increase revenue, or reduce expenses before they need to seek additional funding or risk going out of business.
A positive cash flow runway means that the eCommerce store has enough cash on hand to sustain its operations for a significant period of time, while a negative cash flow runway means that the store is spending more money than it is generating and may need to take immediate steps to increase cash inflows or reduce expenses to avoid running out of cash. It is important for eCommerce store owners to regularly monitor their cash flow runway to ensure the long-term sustainability of their business.