How much cash should I keep in the bank?
Short answer
Three to six months of operating expenses, separated from the operating account, untouchable except for emergencies.
Why this number
A bad quarter, a major equipment failure, or a lawsuit can erase a year of profit overnight. Shops that survive bad years have cash. Shops that don't, fold and blame the economy.
How to build it
A separate account at a different bank, hard to transfer from. Send a fixed percent of every deposit there automatically. Treat it like a tax, not a savings goal.
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