Free tool
Business Emergency Fund Calculator
How much buffer is actually enough for your business?
Emergency fund advice is usually borrowed from personal finance. Business buffers should be sized on fixed costs, income volatility and how quickly you could cut costs if work stopped.
Last reviewed:
Your result
£21,600
Target buffer — 4 months of unavoidable cost
You currently hold about 0.7 months of cover.
- Monthly unavoidable cost (including your minimum pay)
- £5,400
- Target months of cover
- 4 months
- Target fund
- £21,600
- Currently held
- £4,000
- Gap to close
- £17,600
- Monthly saving to close it in a year
- £1,467
Build it in stages. One month of cover is a meaningful milestone; three months changes how you negotiate.
Keep this money visibly separate from operating cash and completely separate from the tax reserve.
Worth pausing on
- Less than one month of cover leaves no room for a late payment or a lost client. Treat rebuilding it as the priority over new commitments.
Assumptions this tool makes
- Only unavoidable fixed costs are counted — the money that leaves whether or not you have work.
- Target months rise with income volatility and with fixed commitments such as staff or premises.
- The tax reserve is treated as separate and not available as a buffer.
The formulas used
- monthly_fixed = premises + staff + software + finance + owner_minimum
- target_months = base (3) + volatility_adjustment + commitment_adjustment
- target_fund = monthly_fixed x target_months
Estimates only. This is a planning aid, not regulated financial advice, tax advice or a personal recommendation. Figures are rounded deliberately to avoid false precision. Your answers stay in your browser: nothing you type here is sent to us, to a partner or to an advertising platform. Read the full disclaimer.