Save at least three months’ worth of operating costs in a bank account, said Emily Fisher, president of Charlotte-based E. Fisher P.A. accounting firm.
For example, if your average business expenses are $10,000 a month, build up $30,000 in your account so you can pay your bills and rent during hard times, she said.
“Over time, you’ve saved that amount and it gives you a cushion to get you through those slow periods,” she said.
Fisher, 40, knows this firsthand. Yearly tax return deadlines in April and October mean high cash flow for her firm, she said. But in other months – especially November through January – “I don’t count on (cash) coming in.”
When you plan your yearly budget, Fisher said, “you definitely need to figure out when your lowest point is, how long it’s going to be, then add a couple of months.”