Deposit-Backed Cash
Can I afford this hire with what is actually mine?
Your bank balance holds money for work you have not done yet. This strips it out, then tests a new hire against what is actually left.
Sample numbers: a wedding photographer weighing a part-time editor. Change them to yours.
1. What the bank says
2. Deposits for work not yet delivered
| Booking | Deposit held | Percent delivered | Row |
|---|---|---|---|
Percent delivered is how much of the job is genuinely done. A wedding you have shot but not edited is not 100 percent.
3. Monthly fixed costs, excluding the new hire
| Cost | Per month | Row |
|---|---|---|
Include what you take out of the business to live on. Leaving it out is the single most common way this calculation comes out wrong.
4. The hire, and what the business earns
Revenue less direct costs, in a normal month rather than your best one.
Runway on this decision
5.2 months
Thin Watch it Covered Waiting
Under six months. You are funding this hire from work you have not won yet. That can be the right call, but it is a bet rather than a calculation.
What is actually yours
| Bank balance | $24,000 |
|---|---|
| Less: unearned deposits | ($14,420) |
| Less: tax owed | ($2,800) |
| Available cash | $6,780 |
72% of the money in the account is spoken for, either owed as work you have not delivered or owed in tax. The balance overstates what you can commit by $17,220.
What a normal month costs
| Fixed costs | $5,095 |
|---|---|
| Plus: the new hire | $1,400 |
| Less: gross profit | ($5,200) |
| Monthly shortfall | $1,295 |
A normal month leaves you $1,295 short once this hire is in. Available cash divided by that gap is how long you can carry the decision.
Runway with the hire: 5.2 months (watch it).
Not a forecast. A point-in-time view of committed cash against available cash, and the monthly gap a hire creates. It does not model seasonality, and an average month hides a seasonal trough. Nothing you type here is saved.