Cash Flow Runway Calculator for Tradespeople

Q: How much cash reserve should a trade business keep?

There is no fixed rule, but many advisers suggest one to three months of overheads in reserve, more for seasonal or lumpy-income trades.

Q: What should I do if my runway is short?

Look at trimming overheads without hurting the business, and bringing cash forward through deposits, faster invoicing, or chasing anything overdue, and avoid taking on new fixed costs until the buffer is rebuilt.

Busy tells you nothing about your buffer

A full diary feels safe. It is not the same thing as a safe business. Runway is a different question entirely: not how much work is booked in, but how long the business would actually last if that stopped tomorrow. Most trades have never worked out that number, and it is one of the more useful ones to know.

Runway is not a target to hit and forget. It is a number worth checking every few months, because it moves as cash comes in and overheads change, and it is the clearest early warning you have.

Why unpaid invoices are a grey area

Money genuinely owed to you extends your runway, but only if it is actually going to land. A reliable customer's invoice due next week is fair to count. A vague promise from a slow payer is not. When in doubt, leave it out and let your runway be a bit more conservative than optimistic.

What counts as a healthy runway

There is no single right answer, but under a month tends to feel tight for most trade businesses, while two to three months gives genuine breathing room to ride out a quiet patch, a big unexpected bill, or a slow-paying customer without panic. The right number for you depends on how lumpy your income normally is.

Questions tradespeople ask

How much cash reserve should a trade business keep?

There is no fixed rule, but many advisers suggest aiming for one to three months of overheads in reserve. Businesses with lumpier income, seasonal trades especially, tend to want more of a buffer than those with steady, predictable work.

Should I count unpaid invoices as available cash?

Only if you are genuinely confident they will be paid soon. A reliable customer's invoice due next week is fair to count. A payment from a slow or unreliable payer is safer left out, so your runway figure does not overstate your real buffer.

What should I do if my runway is short?

Look at both sides: whether overheads can be trimmed without hurting the business, and whether cash can be brought forward, through deposits, faster invoicing, or chasing anything genuinely overdue. Avoid taking on new fixed costs until the buffer is rebuilt.

How is this different from break-even?

Break-even tells you how many jobs a month you need to cover your overheads going forward. Runway tells you how long you could last with none of that new work at all. Break-even is about the ongoing target, runway is about the safety net underneath it.

Cash Flow Runway Calculator

Busy tells you nothing about your buffer

Why unpaid invoices are a grey area

What counts as a healthy runway

Questions tradespeople ask

Keep going

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