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Cash Buffer You Should Hold

Spending $15,000/month, a 6-month cushion means keeping $90,000 in reserve. A 3-month floor is $45,000; a 12-month max is $180,000. The right number depends on how volatile your revenue is.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

Buffer = Monthly Operating Expenses x Desired Months. This is the reverse of 'how long will my cash last' — here you set the duration and solve for the amount. SBA and SCORE commonly recommend 3-6 months for stable businesses and more for seasonal or volatile ones.

What Should You Do?

Scenario 1: a seasonal business should hold 9-12 months to bridge the off-season. Scenario 2: a contractor with lumpy receivables wants 6+ months. Scenario 3: keeping 12 months when revenue is rock-steady may over-idle cash that could pay down debt.

Frequently Asked Questions

How many months should I hold?

3-6 for stable cash flow, 6-12 for seasonal or volatile businesses. Match the buffer to your worst realistic gap between inflows.

Where should the buffer sit?

A separate, liquid account — not mixed with operating cash you might accidentally spend.

Does this replace a line of credit?

No — a buffer is cheaper insurance; a line of credit covers spikes beyond the buffer. See our Line of Credit tool.

Authoritative References

SBA — Manage Cash Flow — Cash reserves and planning.
SCORE — Business Resilience — Mentor guidance on small-business emergency funds.