Cash Flow Scenarios
🤔 How much should you save in your emergency cash reserves?
You should always have an emergency cash reserve to prepare for unexpected expenses.
🙋 If you want a simple answer, shoot for 3-6 months of operating expenses.
Some businesses survive on less. A lot of them do. So don't be hard on yourself. Set this as a goal, give yourself a couple of years to get there.
Ultimately, you need to figure out what makes sense for your business. You'll need to consider all sorts of factors, and every business is different.
For example, a web design agency has different operating capital needs than a wholesaler or a manufacturing business. A business with big one-time payments for projects needs more cash on hand to survive the lean months than a business with a steady stream of recurring revenue from software licenses.
No matter what your business is, Pulse can help you visualize what would happen if you lost a revenue source. Using built-in reports, you can toggle off existing income items to see how it would affect your Cash on Hand.
Use this to prepare your business for anything.
Looking for more cash flow content?
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