Cash Reserve Planning
Build a financial cushion for slow seasons and unexpected expenses. We set a target reserve based on your actual costs, automate monthly transfers, and create rules for when to draw and how quickly to replenish.
What This Is
Cash reserve planning is the process of building and maintaining a financial cushion for your business. It involves determining how much you need to set aside, setting up automatic transfers to make it happen, and establishing clear rules for when that money can be used and how quickly it gets replenished.
Most owners know they should have reserves but never get around to building them. Cash comes in and goes right back out to cover expenses, payroll, and the occasional surprise. Without a system in place, there’s nothing left to capture before it all disappears into operations.
The Target
The Target
We analyze your actual operating costs and determine what three to six months of core expenses looks like for your specific business. Not a generic percentage, but a real number based on your payroll obligations, fixed costs, and overhead.
The System
The System
We set up a separate savings account for your reserve and automate monthly transfers so building it doesn’t require constant attention. We also establish clear criteria for when you can draw from the reserve and how quickly you need to replenish it afterward.
Why This Matters
Most small businesses operate closer to the edge than owners like to admit. When a major customer pays late or equipment fails unexpectedly, there’s no cushion to absorb the hit. The next payroll becomes a scramble, and decisions get made under pressure that shouldn’t be made that way.
In MetroWest, seasonality compounds the problem. Contractors and trades know that winter changes everything. Landscapers, roofers, and exterior painters face predictable slow periods every year. Without reserves, you’re either taking on debt or cutting corners just to get through those months.
The Slow Season
The Slow Season
New England service businesses have months where work slows or stops entirely. Payroll doesn’t pause. Rent doesn’t wait. Insurance is still due. Having three to six months of expenses set aside means you can ride out the slow season without scrambling for loans or lines of credit.
The Unexpected
The Unexpected
Equipment breaks at the worst possible time. A key customer disappears owing you money. Your best employee needs surgery and you have to cover their work with overtime or temps. These aren’t rare disasters. Every business encounters them eventually.
What Changes
You stop operating in reactive mode. When cash gets tight, you draw from your reserve instead of maxing out credit cards or asking vendors for extended payment terms. When an opportunity appears that requires upfront money, you can actually consider it instead of automatically saying no.
The background anxiety fades. You stop checking your bank balance constantly, wondering when something will break. You know that even if several things go wrong at once, you have months to work through it instead of days.
Clearer Decisions
Clearer Decisions
Desperation leads to poor choices. Owners take unprofitable jobs just to keep cash flowing. They defer maintenance until small problems become expensive ones. With reserves in place, you can afford to be selective about the work you take and patient about the decisions you make.
Room to Think
Room to Think
It’s hard to consider growth when you’re worried about next week’s payroll. A healthy reserve creates mental space for planning. You can think about adding services, upgrading equipment, or hiring ahead of demand instead of just surviving until the next payment comes in.
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The Next Step:
A Short Conversation
We'll ask a few questions, figure out what you need, and give you a straightforward quote.