January shows up every year. So why does it always catch us off guard?
If you run an HVAC, plumbing, electrical, or construction business, you know the pattern. Fall is busy. Then the calls slow down, outdoor jobs dry up, and payroll still hits every two weeks. The bills don’t take the winter off.
Most owners handle it the same way. They get through it. They dip into savings, lean on the credit line, or stop paying themselves for a while. Then spring hits and they’re too busy to think about it until next year.
That’s not a winter problem. It’s a fall problem.
Build the Cushion While the Money Is Coming In
The best time to build a cash reserve is while you’re busy. That’s right now. Once December hits, it’s too late to save your way out.
Here’s the simple version. Pick a percentage of every invoice you collect and move it to a separate savings account the day the payment lands. Not at the end of the month. The day it lands.
What That Looks Like in Real Numbers
Say your business brings in $40,000 a month this fall. Set aside 10% and that’s $4,000 a month. By the end of November, you’ve got $12,000 in reserve.
That’s not a fortune. But it covers a couple of lean payrolls, a slow January, or the truck repair that always seems to happen in February. And it keeps that repair off a credit card.
If 10% feels like too much, start at 5%. The habit matters more than the number.
How to Find Your Number
Your books already have the answer. Pull last year’s P&L month by month and look at three things:
- How much revenue dropped in your slowest months.
- What your fixed costs were in those same months, like payroll, insurance, truck payments, and rent.
- The gap between the two.
That gap is your target. Divide it by the busy months you have left, and that’s your monthly set-aside.
If you can’t pull a month-by-month P&L right now, that’s a sign your books need attention before winter does.
Keep It Simple
Keep the reserve in its own account. Don’t count it as available cash, because it’s already spoken for. After the slow season, look back. If you had money left over, good. If you came up short, bump the percentage next fall.
I’d tell you winter might skip us this year. But I’m a bookkeeper, not a weatherman.
If you want help figuring out your number, let’s talk.
Laura Blunk, White Rabbit Bookkeeping
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