MoneyCue guide

How much cash should a small business keep?

Think about a practical cash buffer for a UK small business based on essential monthly costs and upcoming commitments.

There is no single correct number for every business. A company with recurring contracts and predictable collections can tolerate less uncertainty than a seasonal business dependent on a few large customers.

A useful starting point

Instead of choosing an arbitrary bank-balance target, express the cushion in months of essential operating costs. Then adjust upward for seasonality, customer concentration, slow payment, upcoming tax, debt commitments and how quickly costs can actually be reduced.