Three key takeaways on how to manage business finances
- Know your burn rate and runway at all times. If you want to know how to manage business finances, these two are the most important.
- Cash and profit are not the same thing. Cash is what keeps your project alive month to month. Profit tells you if your model works.
- Raising capital takes 6 to 9 months. Start fundraising when you still have 12 to 18 months of runway. Waiting until you have 2 months left is too late.
This article is based on a live masterclass we hosted inside the Ecopreneur Community with Belen Pistek, a finance specialist at Blinkist who is building a side project focused on helping sustainable businesses get financially fit.
This is part one of a two-part masterclass. Part two, on March 24, is fully hands-on: Belen will walk you through building your first financial model step by step, using a template she built for nature ventures.
Every Tuesday we bring in biodiversity heroes, nature founders, and field experts to share what they are building, the lessons they have learned, and real insights for starting or scaling a nature venture.
Check our masterclasses lineup and join our wild community!
Why Belen Pistek ran a finance masterclass for nature founders
Nobody starts a kelp restoration project because they love spreadsheets. Belen knows that.
She opened the session by saying so: “I would like to know if any of you wanna start a nature startup or nature project because you love spreadsheets. Probably not.”
Belen is from Buenos Aires, has lived in Berlin for four years, and works at Blinkist, one of the fastest-growing tech companies out there.
She came to this masterclass because she had seen the same pattern repeat too many times. Nature projects fail “not because the mission is wrong, but because they run out of money, or the costs were underestimated, or the fundraising started too late when the money was already out.”
A mission to reintroduce cheetahs in the wild or restore wetlands is worth nothing if the organisation collapses in month 8. 🐆
Knowing how to manage business finances, she argued, is what lets your mission survive long enough to actually do the thing you started it for.
As she put it: “Finance is not opposite to your mission. Nature or profit is also not against it, it should go together.”
How to manage business finances: understand the meaning of numbers
Most finance terms sound complicated because nobody ever explained them without the jargon. Like a coral reef that looks impenetrable from the surface, the concepts below are far more accessible once you are actually inside them. 🪸
Cash versus profit
These two words are not the same, though plenty of founders treat them like they are.
Profit tells you if your business model works. If someone is willing to pay for what you offer, that is a good sign.
Cash tells you if you can cover your costs this month. You can be profitable on paper and still go under if your customers pay you 60 days after you invoice them.
A bee colony can look busy at the entrance all day, but if the queen died 2 weeks ago, the colony is already counting down. 🐝
Belen described it simply: “Cash is what keeps your project alive, and profit only shows if the business works.”
Track your cash regularly. She suggested checking your business bank account once a week while drinking your morning coffee, writing down what came in and what went out.
That small habit, she said, already puts you ahead of most founders.
The three financial statements
Three documents give you a full picture of where your business stands. Think of them as three cameras pointed at the same forest: each one shows something the others miss. 🌳
1️⃣ The income statement (also called P&L, or profit and loss) tells you if you are making more than you are spending.
Revenue – expenses = your net result.
Starting at a loss is normal, as long as you have a realistic plan to change that.
2️⃣ The balance sheet shows what you own versus what you owe.
Your assets (cash, equipment, inventory) – your liabilities (loans, unpaid bills) = your equity.
It’s what’s actually yours once everyone else has been paid.
3️⃣ The cash flow statement is the most important of the three. It tracks money moving in and out through three streams: day-to-day operations, investments, and financing.
Together, these three tell you whether your mission is financially alive, or quietly running on fumes.
EBITDA and gross margin
EBITDA. 6 letters that have caused more blank stares at founder meetings than almost any other term in finance.
It stands for Earnings Before Interest, Taxes, Depreciation and Amortisation, which helps approximately no one.
The simpler version: how much your business makes from doing what it does, before accountants and banks take their cut.
Your EBITDA margin (EBITDA ÷ revenue) tells investors how much of each euro you earn stays in the business after running costs.
A 30% margin means 30 cents stay per euro earned.
Investors (like VCs) look at this to compare businesses of different sizes. A strong margin is worth more to them than a big absolute number.
Gross margin is the same idea applied one step earlier. To get this, you need first the gross profit.
Revenue – the direct cost of producing your product or service (before rent, salaries, and operating costs) = Gross profit.
Gross margin is that same number expressed as a percentage:
Gross profit ÷ revenue x 100 = Gross margin.
If you earn €100 and your direct costs are €60, your gross profit is €40 and your gross margin is 40%.
These tell you how efficiently your core activity generates money.
Unit economics: do you make money on each thing you sell?
To be financially sound, you need to focus on unit economics. As Belen summed it up: “Unit economics tells you if you make or lose money on each individual thing you sell or deliver.”
The formula
Revenue per unit – cost per unit = margin per unit.
Belen used the example of a regenerative tree nursery. 🌴
Sell a tree for €3.50. Spend €1.40 on irrigation, water, and pots. Margin is €2.10 per tree. Sell 1,000 trees and you have made €2,100. The model works and you can scale it safely.
CAC and LTV
CAC (customer acquisition cost) is how much you spend to get one customer or produce one product: ads, your time, discounts, sales calls, all of it.
LTV (lifetime value) is how much that customer brings you over the relationship.
1 purchase = one LTV.
Someone who buys once has one LTV. A customer on a monthly subscription for 6 months has an LTV of 6 monthly payments.
The ratio between the two tells you if your business is financially sound.
Belen explains, “If your LTV is higher than the CAC, your business works. If your LTV is lower than your CAC, you are burning money.” A healthy LTV-to-CAC ratio is at least 3 to 1.
Once you know what a customer costs to win, the next question writes itself: how do you actually find them without burning through your runway?
How to manage business finances when your unit economics are negative
If the margin is negative, you are losing money on every sale. Scaling, even if great, just means losing money faster. Like a deer population that explodes when the predators disappear, rapid growth without the right conditions to support it ends in a crash. 🦌
If this is where you are, the levers are straightforward: raise prices, reduce costs, or find a way to do more with less.
Belen was clear that negative unit economics at the start is not a death sentence, as long as you have a plan to flip the number and a timeline to do it.
Burn rate and runway: how long can you keep going?
Belen said if you take just one thing from this masterclass, it has to be these two numbers.
Burn rate
Burn rate is how fast you spend cash each month.
Think of it as the campfire at your base camp. You can feel the warmth, things seem fine, you are productive. But if you don’t know how much wood is left or how fast you are burning through it, you will find out the hard way. 🔥
Gross burn rate is your total monthly expenses: salaries, rent, software, everything.
Net burn rate is what you actually lose each month after subtracting any revenue you bring in.
If expenses are €50,000 and revenue is €40,000, net burn rate is €10,000. That’s the real number to watch.
Runway
Runway is how many months your project can survive before the money runs out.
Cash in the bank ÷ monthly net burn rate = runway in months
2 months of runway means you are already out of options.
For nature ventures, this number carries extra weight. Proving environmental impact takes time. Investors and funders don’t move quickly.
Belen made the math clear: “It’s recommendable that you start fundraising when you have 12 to 18 months of runway left.”
Raising capital takes 6 to 9 months in a good scenario. If you wait until you have two months left, no one can save you in time.
So start to think about fundraising strategies now before it’s too late. You’ll see there are more ways to fund a nature business, and some of them do not involve investors at all.
How to manage business finances: start before Belen’s next masterclass
How to manage business finances is up to you. But don’t do the possum playing dead when it sees danger (in your case when you see numbers). Like Belen said, “even a rough number, it’s better than ignoring.” 🐾
Start with burn rate and runway. Know those two and you’ll already make better decisions about growth, hiring, and when to start talking to funders.
You don’t need a finance degree to make it work. A simple spreadsheet works. Even the habit of checking your bank account once a week is better than nothing.
But we understand how scary and complicated it might seem. That’s why there’s a part 2 of this masterclass, on March 24.
Belen will walk you through building your first financial model step by step, using a template she built for nature ventures. Bring your laptop, your numbers, and your questions. That one is hands-on.
This article is based on a live Wildya masterclass with Belen Pistek. The recording is available inside our Ecopreneur Community. We host a new masterclass every Tuesday with founders building in the nature space. Join us now.
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