How much working capital should you keep on hand?

Working capital is the cash that keeps the lights on between covers and payroll. Too little and a slow week becomes a crisis; too much and you're starving growth. Here's how to size it.

The one-number rule of thumb

Most restaurant operators should hold 2–3 months of fixed costs in accessible cash — rent, insurance, loan payments, and the payroll you owe no matter how many covers you turn. That’s the buffer that carries you through a remodel, a slow January, or an equipment failure without reaching for a high-cost cash advance.

How to size it for your shop

Add up your fixed monthly costs. Rent, utilities baseline, insurance, debt service, salaried labor.
Multiply by your risk window. Steady neighborhood spot? Two months. Seasonal or newly opened? Three or more.
Subtract what’s already liquid. Cash in the bank plus an undrawn line of credit both count as reserves.

When to top it up with financing

If your reserve dips below one month of fixed costs heading into a slow season, that’s the signal to line up a working-capital facility before you need it — terms are always better when you’re not desperate. A line of credit you draw only when needed beats a lump-sum loan you pay interest on from day one.

The goal isn’t to hoard cash. It’s to never let a predictable dip force an expensive decision.

Use the cash-flow check below to see where your balance lands over the next 90 days at your current run-rate.

This is an estimate for planning only, not financial advice. RestaurantOwners.news is a marketplace, not a lender — actual rates and terms are set by partner lenders, and not all applicants qualify. RestaurantOwners.news may earn a commission from tools and partners we link to. We only feature things we'd actually use to run the business.