$650,000 in the bank at all times
It isn't an arbitrary figure. It's the working capital rule applied at one revenue size, and the rule scales to whatever size you are.
Cash is the last of the three because it's downstream of both. Profitable companies run out of money every year, so profit alone doesn't produce a balance. What produces a balance is working capital held at a percentage of revenue, billing that goes out on time, and a forecast that tells you in March what April looks like.
13% of revenue, at any size
Working capital is current assets less current liabilities. Hold it between 10 and 15% of annual revenue and aim at 13%. Here is what that asks for as you grow.
| Annual revenue | 10% floor | 13% aim | 15% ceiling |
|---|---|---|---|
| $5,000,000 | $500,000 | $650,000 | $750,000 |
| $10,000,000 | $1,000,000 | $1,300,000 | $1,500,000 |
| $25,000,000 | $2,500,000 | $3,250,000 | $3,750,000 |
| $50,000,000 | $5,000,000 | $6,500,000 | $7,500,000 |
| $100,000,000 | $10,000,000 | $13,000,000 | $15,000,000 |
| $500,000,000 | $50,000,000 | $65,000,000 | $75,000,000 |
Where $650,000 comes from. It's the 13% aim at $5M of revenue. This site asserts that arithmetic at build time, so if either the rule or the figure ever changed without the other, the page would stop publishing.
The reasoning
Banks and sureties don't read your P and L first. They read working capital, which is current assets less current liabilities, and they read the current ratio. Holding the target percentage is what buys you bonding capacity, a real line of credit rate, and the ability to survive a general contractor paying sixty days late without touching a factoring company.
As a floor you don't go under, not as a balance you spend down. The number moves with revenue, so it goes up as you grow, which is the part that catches owners who grew fast and wondered why cash got tighter as the company got bigger.
Under it. Below the floor and every decision starts getting made by whoever is loudest on the phone. That's the state most owners describe when they call, and they usually describe it as a collections problem when it is a working capital problem.
Three moves, in order
Step 07: Monthly cadence
Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month.
What sits either side of this one
What owners ask
How much cash should a construction company keep in the bank?
$650,000. It isn't an arbitrary figure. It's the working capital rule applied at one revenue size, and the rule scales to whatever size you are. Cash is the last of the three because it's downstream of both. Profitable companies run out of money every year, so profit alone doesn't produce a balance. What produces a balance is working capital held at a percentage of revenue, billing that goes out on time, and a forecast that tells you in March what April looks like.
Why $650,000 and not some other number?
Because it's one output of a rule, not a figure on its own. Working capital wants to sit at 10 to 15% of annual revenue and you aim at 13%. 13% of $5M is $650,000. At $10M the same rule asks for $1,300,000. The rule travels, the figure doesn't.
What moves this number?
The step is number 07, monthly cadence. Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month. It's chapter 7 of CONTROL: The Construction Financial Operating System.
How do I read it?
As a floor you don't go under, not as a balance you spend down. The number moves with revenue, so it goes up as you grow, which is the part that catches owners who grew fast and wondered why cash got tighter as the company got bigger.
What does it mean if I am under it?
Below the floor and every decision starts getting made by whoever is loudest on the phone. That's the state most owners describe when they call, and they usually describe it as a collections problem when it is a working capital problem.
Where do I start?
Calculate current assets less current liabilities off your latest balance sheet. That's your working capital today.
Josh Luebker ran commercial construction projects before he ran the numbers behind them, on data centres, military bases, hospitals, and high-rises. He wrote CONTROL: The Construction Financial Operating System, which is an eight-step framework for commercial subcontractors, and it publishes on October 1, 2026. He is a master electrician who moved into the office and kept the field vocabulary.
Sulphur Prairie Operations LLC maintains the benchmark reference behind these figures. Every edition is reconciled against the newest CFMA survey release before it publishes here. Where a figure changes between editions, the older edition keeps its year in the title so a citation to it stays correct.