It is interesting to see the majority of people had less than $10,000 – intersting because of one reason. I never knew that before I read the blog.. So for interests sake… it was..um Interesting..

I’m not sure how I can compare your business to mine or anyone elses. But somehow I want to! I’m wondering if it’s also a combination of what you have (financially), how you make it work for you (lifestyle) and what your chances are of sustaining the business into the future by exploring new opportunities or by developing what you already do (future-proofing to ensure the above remain positive).

That would be an amazingly useful metric, but alas, it’s probably impossible to quantify.

You didn’t tell us how much cash reserves we should be keeping in the bank – which was your initial question few days ago. What do you think?

I believe it’s wise to have at least two months cash in the bank. But this must be coupled with a pessimistic cash flow Excel sheet.

That way, you should know way before two months in advance, whether the company is in trouble.

You didn’t tell us how much cash reserves we should be keeping in the bank – which was your initial question few days ago. What do you think?

By the way, I also agree that “how many months expenses” are in the bank would be a better measurement than the actual cash amount. I run a company in Serbia and I need less money to pay salaries and expenses here than for someone in the UK.

A few years ago we had a parasite make a dirty offer for one of our companies because the last set of accounts and our credit rating were both less than bright.

What he failed to grasp was that when he approached us everything was running very well.

Sometimes you have to keep a stupid amount of money on deposit to prove that you don’t need credit or any work from a client – how mad is that ?

Sorry for the double post.

… or something similar?

In someways I now need to know more!!

So small businesses (1-10) have less than £10,000 (I’m doing a straight pounds to dollars conversion). Well I run a small business and have more than that so do I feel good, better, sucessful? Nope, not really.

Maybe all these others have personal wealth and assets, maybe their prospects for the next few years are better than my company’s. Perhaps their order books are full with new projects.

It’s really difficult comparing how individual businesses are actually doing. And while I’m very keen to know about peoples finances I’m also aware that there are other factors which I’m interested in too.

Take “Carson Systems”, for example, based in Bath – that’s a nice town to be based in, you seem to be doing well, diversified in a number of areas, You (RC) have achieved a good reputation in your field. You also seem to have achieved a good work/life balance. You appear to be doing what you want to do and what you’re good at. If you have cash in the bank to pay your staff for the next few months then I guess all is rosey.

I’m not sure how I can compare your business to mine or anyone elses. But somehow I want to! I’m wondering if it’s also a combination of what you have (financially), how you make it work for you (lifestyle) and what your chances are of sustaining the business into the future by exploring new opportunities or by developing what you already do (future-proofing to ensure the above remain positive).

Just my thoughts!!

I’ve got to agree with the sentiment that you referred to in your post.

The amount of cash is meaningless. How long your business would last without another penny coming in is the relevant sum. Call this “runway” or the “drop-dead” date, it’s the day you can’t pay your bills.

Care to elaborate on why you find it ‘interesting’? :-)