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View Full Version : How much money in the bank??


Lawnworks
12-13-2005, 12:42 AM
How much money in the bank is enough money? I know it largely depends on the size of your payroll, but I am talking back-up money/savings. What do yall think is enough for 100k gross, 250k gross, and 500k gross? And lastly, do you actually follow your advice?

rbriggs
12-13-2005, 07:57 AM
I'm not sure how much is enough. But I wll tell you that in our peak season (Spring/Summer), we pay bills that would otherwise creep up on us in the winter when it is typically slower. Last year, we also opened a second checking account and deposited a set amount in their each and every Friday. So we use that as a buffer in the slower months.

YardPro
12-13-2005, 06:18 PM
when i was solo and doing 100K per year i would have about $15 K in the bank at the end of the season.... I needed half of that to start up again in march..

I tried to keep a balance of at least $5k.. should have been double that... that's why i had to merge with someone else...............

MacLawnCo
12-13-2005, 06:32 PM
Ill give you the theoritical answer.

You need to look at your statement of cash flows. Do this month by month and you will likely see that there will be months where your business uses more cash than you take in. Take the largest of these figures, add 10% and that is how much reserves you need.

As you can see, this has nothing to do with your gross sales.

SodKing
12-13-2005, 06:41 PM
I try to keep the balance above 5 mil at all times...

hoskm01
12-13-2005, 10:40 PM
I try to keep the balance above 5 mil at all times...



Im sorry, did you say 5 million?;)

cwlawley
12-13-2005, 11:12 PM
mil...spanish for thousand

walker-talker
12-14-2005, 09:14 AM
mil...spanish for thousand
Yeah...either that or sarcastic for english:rolleyes:

MMLawn
12-14-2005, 09:42 AM
Most all successful business folks and good finance folks will tell you that a business needs 2-6 months worth of reserves (total it take to pay all bills per month).

rodfather
12-14-2005, 10:36 AM
Everyone's cash reserve is gonna be different. We always have an amount that is fairly substantial along with the fact I have a business line of credit if I need to draw upon up to and including 75K.