Cash Flow + Reserves
Cash floor: how much should stay in the business
The cash floor is the level the company should not casually dip below without a reason.
Executive lens
A useful brief turns the issue into a decision.
Trap
Trap
Treating all cash above zero as available.
Signal
Signal
Cash floor
Move
Move
Set reserve months
Rule
Rule
A floor turns cash anxiety into a rule.
Why it matters
Treating all cash above zero as available.
Stakes
Cash is the part of the business that punishes vague thinking. Profit can look fine while payroll, taxes, receivables, equipment, and deposits pull cash in different directions.
Why it gets missed
Owners usually look at the bank balance because it is immediate. The balance is real, but it does not explain what has already been promised. In this case, the practical trap is simple: treating all cash above zero as available..
Field pattern
Start with the lowest expected cash point, not today's balance. A decision is safer when the business stays above its floor after payroll, taxes, payables, debt, and planned owner distributions.
Numbers to watch
The metric is useful only when it changes behavior.
Cash floor
Defines the cash level the business should not casually cross without a deliberate reason.
Operating reserve
Use this as an early signal before the owner makes a bigger decision from incomplete information.
Monthly burn
Shows how quickly the business consumes cash when revenue or collections slow.
Operating moves
What to make visible before the next decision.
Move 01
Set reserve months
Move 02
Adjust for seasonality
Move 03
Review every distribution against the floor
Owner questions
Use the brief in a real review.
1
If cash floor moved this week, what decision would change?
2
Which person, process, or rule owns set reserve months?
3
What would make this number untrustworthy right now?
4
If nothing changes for 90 days, what gets harder for the owner?
Interactive model
See the principle in numbers
More invoices
+50%
More payroll
+42%
More equipment pressure
+36%
More working capital
+48%
More management load
+45%
Reality check
A 50% sales goal is a 50% operating-system question.
Before chasing the number, decide what has to change.
JGC Hub gives cash a job: operating floor, taxes, growth reserve, debt, distributions, and decisions that depend on the next trough.
Start with the system
Make this visible in the operating rhythm.
The brief explains the idea. JGC Hub gives you the categories, rules, and review cadence to keep it from drifting.