financeNo Comments

burn rate


I’m sure you don’t need me to tell you this, but starting a business is hard work. Your days are spent interviewing potential customers, creating wireframes, building your first MVP, getting it out there for feedback, iterating and iterating. If that wasn’t enough, you’re also on the lookout to find others who are equally as passionate as you about the problem, interviewing them and getting them to join your team… unpaid. Of course, if you can win some competitions and grants, you might be able to extend your burn rate.

You can continue bootstrapping or you could go down the funding route, which is another rabbit hole we’re not getting into.

But it’s also not like this is your only commitment. You still need a roof over your head, food in your body, and student loans to pay back. With a limited amount of personal savings, you have your own personal burn rate.

I can’t help you with the building of a business, but I can suggest some ways to minimize your own burn rate.


Tackling your housing expense

By far the largest expense you’ll have. CTV has reported that if you’re living in Toronto and wanted a bachelor in Downtown Toronto, you’ll be paying $1376 a month. So what’s the best way to lower this expense? Living at home! It might be harder to get around, but think about it: how much will your personal run rate extend if you were to live at home? What other parts of the business will you be able to grow with this additional savings?

If living at home isn’t possible, then renting a condo with a few friends would be your best bet. Once again, according to CTV, a 3 bedroom condo in downtown Toronto would cost you $2789. Split among 3, it’d be $929.67 per person. But once again, I think we can do better. You’re not living a luxurious life right now(otherwise you wouldn’t be attempting to start your own company). So I would suggest living somewhere on the transit line. Sky View Suites actually made a great infographic showing the cost of the average 1 and 2 bedrooms along the Toronto subway line.

Another option is to do what the Pied Piper guys do in the show Silicon Valley: turn a house into an incubator. Going on Kijiji, I found a house near Don Mills station. It has 7 rooms and costs $3300 / month + utilities. That works out to just under $450 a person. If you want to live there for free, it’d be $550 for your roommates. Brand it as an incubator and maybe you’ll be able to charge $700 and in return, you can order pizza for the house 5x a week.

Maybe Founders Canada can help facilitate this ;).


Minimizing your food expense

Kraft Dinner. Twice a day. Everyday. At $1.50, you’re looking at just under $46.50 a month.

Yes that’s a joke. Though it’s possible, you will destroy your health doing so. However, I do think you can get your monthly food expenses down to $150 a month. Heck, I have a friend who claims that she can get under $100.

I go into all the details on my site, But here is the short version:

Buy from asian supermarkets

Asian supermarkets can offer a much lower price for their food because they don’t really go for a brand. No brand = no brand premium.

In terms of quality of produce – they all come from the same set of suppliers, but the asian supermarkets tend to offer “lower quality” produce. The way it works is that branded chains will pay a premium to pick what they want first. They will pick for the produce that looks the best and has the best shelf life. The asian supermarkets will then choose at the end, but won’t have to pay as much. In return, they will sell their produce at a lower price to get it out of their store. This means that you should plan to finish the produce in a week’s time.

And if you’re still hesitant, talk to your asian friends who are pretty Canadian. I’m sure they’ll give their stamp of approval.

Price match

You won’t be able to buy everything you want at asian supermarkets, so you’ll still need to go to the larger chains. Luckily, some of these chains are willing to price match with their local competitors (some will even price match against asian supermarkets). Price matching has gotten a lot easier with apps such as Flipp. All you have to do is search the items you want, find the lowest price and note it in the app. Then go to a store that will accept price matches (in Toronto, it’d be FreshCo, No Frills, and Real Canadian Superstore). Show them the items on your phone and off you go.

Student Loans

Did you know that even if you declare bankruptcy, your student loans won’t be discharged until 7 years after you’ve left school? That’s rough.

Did you also know that the government has a lot of different programs to help reduce the debt burden? You won’t be able to qualify for all of them, but there are definitely some you should look into.

Repayment Assistance Plan

By far the most valuable debt relief program out there. The repayment assistance plan (RAP) states that the government will pay your student loan interest if you make under $25,000 a year. This isn’t something that is automatic, rather you have to apply for it every 6 months.

Remember though, you are still responsible for making your principal payment.

OSAP grace period for entrepreneurs

Normally, your loan grace period is 6 months after graduation, but if you apply for the OSAP grace period of entrepreneurs, it can be extended to one year AND the Ontario government will pay for your interest during this time. This is a nice bonus if you’ve recently graduated.

Other programs

There are a bunch of other programs both in Ontario and across Canada. Some of them will pay for your interest. Some of them will actually forgive a portion of your loan (as in you never have to pay it back). If you’re interested in learning more about any of them, read the ultimate guide to student loans.


Starting a business is a daunting task, and it gets much harder if you constantly have to worry about your own financial situation. If we can drop our monthly expenses as low as possible, it can do wonders for extending our run rate. Some of the best ways to extend our run rate is to lower our rent expenses, lowering our food expenses and lowering our interest payments on our student loans.

But this is just the tip of the iceberg in expense reduction. If you want more practical suggestions, take a read on how you can save $3000 a year.

What other suggestions do you have to your fellow entrepreneurs?

About the Guest Author

Chungsoon is the founder of, a website dedicated to helping people’s finances fuel their aspirations and not cause them frustrations.


Comment closed!