How Do You Reduce Burn Rate?

How Do You Reduce Burn Rate?

1 Answer

  1. Its necessary for a company to maintain a good burn rate, and if somehow it rises then there are some ways by which a company can reduce it. Firstly its important to know that a higher burn rate implies that the cash is depleting at a higher rate in such a case company can either increase its cash reserves or reduce the spending. Well there are more technical ways to describe that how it can be reduced:
    A company can make a pay cut or can also go ahead for lay offs, which means it can reduce the staff during high burn rate. Layoffs often occur in larger start-ups that are pursuing a leaner strategy or that have just agreed to a new financing deal.
    A company can project an increase in growth that improves its economies of scale. This allows it to cover its fixed expenses to improve its financial situation.
    A company should also focus on return on investment and to have an MVP before seeking for financing.

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