Cash reserve sizing for a Collierville, TN chiropractic office: five fixed monthly costs, reserves of one to three months, the months of surplus each takes, and the interest on a 40-day credit line draw. All figures are invented.
Adding up the fixed monthly costs of a Collierville, TN chiropractic office
Sizing a cash reserve starts with the bills that arrive whatever the month brings. An invented Collierville, TN chiropractic office lists five of them:
| Cost | Per month |
|---|---|
| Suite rent | $5,850 |
| Staff payroll, two semimonthly runs of $8,900 | $17,800 |
| Practice-management software and phone service | $1,140 |
| Business insurance | $960 |
| Treatment table loan payment | $1,310 |
| Total | $27,060 |
Supplies and marketing stay off this list because the office can trim them in a month when visits drop; the five lines above come due at the same amount every month.
Reserve sizes measured in months of costs for a Shelby County, TN chiropractic office
The invented office has $14,000 in the bank and keeps $4,510 a month after every bill is paid. Each reserve size below is a multiple of the $27,060 monthly total:
| Reserve size | Amount | Still to save from $14,000 | Months of $4,510 surplus |
|---|---|---|---|
| One month of costs | $27,060 | $13,060 | 3 |
| Two months of costs | $54,120 | $40,120 | 9 |
| Three months of costs | $81,180 | $67,180 | 15 |
Because the invented $27,060 monthly total is exactly six months of the $4,510 surplus, each added month of reserve takes six more months of saving. The last column rounds up: after two months the office has put aside $9,020, still short of $13,060, and the third month’s $4,510 carries it past the one-month mark. How large a reserve to hold is the owner’s call; the table shows what each size asks of the account.
Saving toward the reserve with a credit line behind the unsaved part: a Collierville, TN chiropractic office
While the reserve is still short, a business line of credit can stand behind the part not yet saved. Interest runs only on what is drawn, so an unused line carries no interest, though an offer may list a yearly charge for keeping it open.
Invented example: in month two, before the one-month reserve is complete, a treatment table needs a $6,850 repair. The office draws the $6,850 and repays it 40 days later. At a 14.8% annual rate, the invented interest is about $111.10, worked as simple interest on a 365-day year.
The invented draw does not make the repair cheaper. Repaying $6,961.10 still comes out of the account, so the one-month reserve now arrives in month five rather than month three: $20,021.10 left to save at $4,510 a month is 4.44 months, rounded up. What the line changes is timing, since the repair is paid on the day it is needed without draining the account in month two. A funding partner sets any limit and rate after its own review, so these figures show the arithmetic, not an offer.
Topics the articles take up for Collierville, TN practices, kitchens, crews and hotels
Articles on this blog take up these subjects for Collierville, TN businesses:
- Handpieces, ultrasonic scalers and sedation monitors for a dental practice
- Leasing or owning soft-serve machines at a quick-service restaurant
- Stump grinders and wood chippers for a landscaping crew
- Direct-billed stays and meeting-room equipment for a hotel
- Liens, guarantees and the yearly payment split on a medical practice loan
- Interest-only months on a veterinary clinic’s term loan
Each article works through its own invented numbers. For a cost that none of them covers, the request form and phone line are open to any trade.
By Baydale Funding Group · Updated