27 days…or less

Bloomberg: On average, the companies surveyed have just 27 days worth of cash reserves – or money to cover expenses if inflows suddenly stopped – according to the JPMorgan study, which analyzed 470 million transactions by 570,000 small business last year. Restaurants typically hold the smallest cash buffers, with just 16 days of reserves, while the real-estate sector boasts the biggest, at 47 days.

I’d like to see cash reserves and other business practices as metrics for Farmers Market Metrics in a later iteration. My sense is that the internal data of a market’s (and of its businesses’) bookkeeping and accounting-norm practices can be collected under the term “Resiliency” and offer advocates some wonderful data in order to extend the lifespan and/or decrease the learning curve of new or expanding farmers markets and its businesses.

It has long seemed to me that many small businesses within markets mistake cash flow for profit which often leads to surprising exits from  those markets. Therefore, the more  a market understands the difference between these two for itself and can begin to assist its types of business with establishing baselines for this data, the more that the USDA and other supporters can be encouraged to offer even more detailed assistance.

Bloomberg

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