Cash & Capital

Operating Reserve Sizing

Size your all-purpose operating cash reserve from real monthly overhead, revenue volatility, and your payroll reserve target.

Monthly overhead$/monthRevenue volatility%Desired months of covermonthsPayroll reserve target$

Operating reserve target$32,250

Overhead reserve$15,000

Volatility buffer$2,250

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VisualBuilding a Cash Buffer That Covers PayrollA slow month should never mean scrambling to make payroll. A 4-person crew needs $20,800 set aside to cover 4 weeks with zero incoming revenue, a number that scales exactly with crew size and however many weeks of cover feel safe.

Methodology

Formula: Overhead reserve = monthly overhead × desired months of cover. Volatility buffer = overhead reserve × revenue volatility %. Total = overhead reserve + volatility buffer + payroll reserve target.

Assumption: Revenue volatility is your own self-assessed band, not a researched industry figure.

Limitation: Not autofilled from Overhead Allocation & Break-Even Revenue: that engine publishes a $/hour rate, this needs a $/month figure, and converting between them would require an hours-per-month assumption neither engine otherwise needs.