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What's the liquidity of a small company owner?
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Date: April 23rd, 2026 4:27 PM Author: Opaque private investor Someone who owns a small company with low 7 figure EBITDA and somewhere in the dozens of employees? How much cash, liquid stock, etc. do these guys typically have on hand?
Seems like a lot of these guys have great businesses but spend or reinvest a lot and don't have a ton of cash just sitting around. |
Date: April 23rd, 2026 4:33 PM Author: supple outnumbered forum persian it varies so much. most of the businesses are trades owned by ascended scumbags and their finances are exactly what you'd expect. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49837820) |
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Date: April 23rd, 2026 7:27 PM Author: Opaque private investor Describe the range of outcomes. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838431) |
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Date: April 23rd, 2026 8:13 PM Author: supple outnumbered forum persian wdym? they all do great. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838521) |
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Date: April 23rd, 2026 8:17 PM Author: Sable Parlor It depends on the business, but with "low seven figures" EBITDA ($1m - $3m), an owner ought to be able to pull out $500k - $1m annually in addition to a reasonable salary. The bigger thing you see in these situations is stuff getting run through the business. "Work" trucks and what not. Employing spouses and family is another major perk. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838535) |
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Date: April 23rd, 2026 8:43 PM Author: Opaque private investor All true but my question is more about how much cash they keep on hand. As well as liquid securities like in brokerage accounts. $1 million? Less? More? (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838583) |
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Date: April 23rd, 2026 9:22 PM Author: Apoplectic angry abode boltzmann Are you planning on robbing one? (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838729) |
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Date: April 23rd, 2026 10:43 PM Author: Opaque private investor I own one of these businesses. My total liquid assets equal about one year's EBITDA. That feels really tight to me and I am trying to stockpile more cash. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838869) |
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Date: April 24th, 2026 2:34 PM Author: Apoplectic angry abode boltzmann Ah, now I understand. I think it depends on many factors: working capital needs, e.g., receivables (size and timeliness of collection), inventory, investment needs,etc., plus growth trajectory, how cyclical is the business, and revenue and expense predictability. I usually look at it in terms of how many months of expenses with no income could I endure. 3 months is the goal I have set for a small business on whose board I sit. We're nowhere near that at present, but it's a goal. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49840003) |
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Date: April 25th, 2026 12:31 AM Author: Opaque private investor Any idea how much liquidity the owners have personally? (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49841244) |
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Date: April 25th, 2026 5:42 PM Author: Apoplectic angry abode boltzmann I said it was a "business," but it's actually a non-profit. We try to run it like a business. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49842665) |
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Date: April 24th, 2026 2:36 PM Author: Sable Parlor Nice! Congrats to you on this. I think this sort of life is better than virtually any other. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49840010) |
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Date: April 25th, 2026 12:12 AM Author: Opaque private investor Appreciate you saying so. There are still many issues. I wake up every Monday morning with a sword of Damocles called payroll hanging over my head. Bottom line, no matter what. That's before you get to the challenges of managing an organization, dealing with regulatory pressure, keeping the flow of customers coming, etc.
I am very blessed and very thankful. But the stress is insane sometimes. I am trying to stack enough cash and diversify enough that the business doesn't dominate my life to such an extent. But that's a long process. |
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Date: April 25th, 2026 6:43 PM Author: Sable Parlor Depending on the size of the business (and the industry to some extent), you may be in a position to bring on a "professional" #2. Lots of guys out there who can't get from zero to one, but who can take a smaller company with meat on its bones and scale it. (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49842828) |
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Date: April 23rd, 2026 10:11 PM Author: Pink frozen mood Enough to keep the lights on for six weeks is a good baseline (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838820) |
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Date: April 23rd, 2026 11:31 PM Author: Spectacular Menage (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838949) |
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Date: April 23rd, 2026 11:06 PM Author: Opaque private investor (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49838929) |
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Date: April 25th, 2026 12:27 AM Author: lemon office at least 11 (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49841241) |
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Date: April 25th, 2026 12:28 AM Author: Opaque private investor 11 what? (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49841243) |
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Date: April 25th, 2026 8:19 AM Author: Opaque private investor (http://www.autoadmit.com/thread.php?thread_id=5859824&forum_id=2E#49841456) |