The Median Small Business Has 27 Days of Cash. How Many Do You Have?

The JPMorgan Chase Institute analyzed 470 million transactions from 597,000 small businesses and boiled survival down to one number: cash buffer days. If every dollar of income stopped tomorrow, how many days could you keep paying the bills?

The median answer is 27 days. One in four businesses holds 13 days or fewer. That's two missed closings from the edge.

Here's the twist for our industry. Real estate firms held the most buffer of any sector studied, 47 days. Restaurants held 16. Why? Because commission businesses that survive learn to hoard cash between checks. The ones that never learned aren't in the data anymore.

Most agents can't answer the buffer question because they've never run the math. So run it now. Add up what your business actually spends in a month: MLS, marketing, car, phone, E&O, assistant, all of it. Divide by 30. That's your daily burn. Now divide your business account balance by that number. That's your buffer days.

If you're under 30, every decision you make is a scared decision. You take the overpriced listing. You cut your commission. You chase bad clients because bad money looks like money when the account's thin. Buffer isn't safety. It's negotiating position.

Give yourself a target: 90 buffer days. Get there by moving a fixed percentage of every commission check, 10% minimum, into a separate account you don't touch. Not what's left over. First.

The study's called "Cash is King." The researchers were being polite. Cash is oxygen.

Diana Farrell and Chris Wheat published this research through the JPMorgan Chase Institute. Read the full report here: https://www.jpmorganchase.com/institute/all-topics/business-growth-and-entrepreneurship/report-cash-flows-balances-and-buffer-days