Burn rate is the money a department or organization spends over a month or year if nothing changes. Treating it as a contextual operating measure makes costs easier to explain and use for budget and growth planning. section 2.2.1
Build a practical burn-rate view by:
- Grouping expenditure into Development, Production, and Support, then breaking those areas down further when product lines or organizational groups require it. section 2.2.1
- Maintaining a simple spreadsheet that records salaries, overhead, licenses, cloud or hardware, vendors, and training costs as they recur. section 2.2.1
- Reviewing the expenditure sheet periodically with the CFO to make figures predictable, dependable, and easier to defend during budget approval. section 2.2.2
Turn salaries into project costs
For a developer earning $100K, adding 20% overhead produces a $120K annual cost, or $10K monthly and $500 per working day. A project requiring 14 days therefore carries a $7,000 developer cost. section 2.2.1
Table 2.1 Example monthly breakdown (view table figure)
A monthly breakdown makes recurring costs visible across cloud infrastructure, staff, software licenses, and support. section 2.2.1
