Cash is the fuel for your business, so it’s important to know how much to have on hand. While the recommended practice is to maintain reserves equal to 3-6 months of operating expenses, in real small business circumstances, a “one-size-fits-all” formula may not be the best fit for your business. The better approach is to tailor your cash reserves based on your specific business needs. Doing this will strengthen your foundation. For some suggestions, I recommend a recent article on the AmEx Open Forum. It offers seven insightful questions that can help you zone in on your company’s unique requirements. Read it here.
If you would like further help with cash flow management, reach out to me at 214-454-9051 or firstname.lastname@example.org.