Cash as protection.
WHAT IT IS
Money set aside for unexpected events and quiet periods.
WHY IT MATTERS
It covers what insurance does not It prevents a small problem becoming a crisis It allows you to decline bad work
THAT LAST ONE
A business with no buffer accepts work it should refuse.
HOW MUCH
Enough to cover your costs for a period you would need to recover.
Ask yourself how long that would be.
HOW TO BUILD IT
A proportion of income, consistently, into a separate account.
WHERE TO KEEP IT
Separate from your operating account, so it is not spent.
WHAT NOT TO USE IT FOR
Ordinary costs Expansion Anything that is not genuinely unexpected
WHAT TO REPLENISH
Whatever you use, deliberately.
WHAT THIS PROTECTS AGAINST
Late payment A quiet period Equipment failure A lost customer An uninsured loss
WHAT IT BUYS
Time to respond rather than react.
