How much cash should you leave in a business?
How to manage cash flow and reserves in your business. Very similar to a properly managed personal account there a few musts to have when you have extra money and you need to always have enough extra to put money aside for these things in business.
10% of all profit should be put in a reserve account for the following:
- Money needs to get set aside for at least 2–4 weeks of operating expenses.
- An emergency fund for a piece of equipment that may need to be replaced or legal fees regarding a dispute.
- Growth opportunities
- Capital improvements
