What Is a Cash Business? (Plus 52 Ideas for How To Start One)
Updated September 30, 2022
Many people want to start their own companies to achieve financial independence and have more freedom over their schedules. Some entrepreneurs choose the cash-only business model, meaning they only collect physical money from customers. Using this model can help establish a foundation for a business by increasing its profits and reducing fraud. In this article, we discuss what a cash business is and share 52 ideas you can use to start one.
What is a cash business?
A cash business is a company that primarily operates using physical currency. These businesses strive to accept printed money and coins from customers, meaning they typically don't accept checks, money orders or credit and debit cards. These businesses may also primarily use cash to pay vendors.
Related: How Does a Cash Budget Work?
53 cash business ideas
Here are 53 cash business ideas across various industries:
Cash businesses in the food industry
Here are nine cash business ideas related to the food industry:
Food delivery service
Health food store
Personal chef services
Cash businesses in the household services industry
Here are 11 household services that may only accept cash from customers:
Computer set up and repair services
Cash businesses in the retail industry
Here are seven cash business ideas related to the retail industry:
Craft show vendor
Flea market vendor
Cash businesses in the educational services industry
Consider providing these educational services if you want to collect cash from customers:
Cash businesses in the entertainment industry
Here are 10 cash business careers related to the entertainment industry:
Bowling alley manager
Batting cage supervisor
Indoor trampoline park manager
Night club manager
Comedy club supervisor
Miscellaneous cash business ideas
Here are seven other cash business ideas to consider:
Parking meter services
Parking lot management services
Plant nursery management services
Pet grooming services
Auto detailing services
Related: 42 Online Business Ideas To Explore
Pros of a cash business
Having a cash business can allow you to:
Eliminate credit card fees
A company that accepts credit card payments partners with a processing provider and opens a merchant account. It also sets up payment terminals and integrates the provider's payment portal with its e-commerce platform. In addition to this setup being time-consuming and expensive, the company pays interchange, payment processor and assessment fees on every transaction. Businesses can eliminate these fees by using a cash-only model. The 1.5% to 3.5% of transaction totals they save can help them drastically increase net profits, especially if they sell lower-priced items.
Receive immediate payments
When customers pay in cash, the business immediately receives the money. This instant access eliminates waiting times for checks to clear or credit card payments to appear on an account. Businesses can use their increased cash flow to pay employees and vendors on time, reduce their lines of credit and increase overall liquidity.
Cash transactions are relatively straightforward, as the customer either has the cash or doesn't. If they don't have the cash, they can't complete their transaction. If they do have cash, the business can verify its legitimacy through counterfeit tools and provide the product or service upon authentication.
Non-cash transactions are a little more complicated, as the customer may receive the product or service before the business can verify the payment. For instance, a credit card payment might not process if the account holder has insufficient funds. Dishonest individuals may also try to use fraudulent checks and money orders. If you want to prevent these scams, consider making the business cash-only.
Cons of a cash business
Here are some cons of starting a cash business and how to overcome them:
It may be inconvenient for customers if a business only accepts cash. This is especially true for younger customers who tend to rely on credit and debit cards or mobile payments. For instance, a customer might have to make a bank withdrawal before shopping at the store you run. If there's a store nearby that offers similar services and accepts credit cards, they might choose a competitor instead of making an additional stop at the bank.
One way to welcome as many payments as possible while only accepting cash is by advertising your policy. You can clearly list the term "cash-only" on your website and post signs at your storefront to ensure customers know what to expect. Another way to increase convenience is by situating your storefront near an ATM or installing an ATM inside. Note that some cash businesses accept other payment methods. For instance, you might allow customers to pay with a credit card if their purchase is at least $10. This policy encourages cash for smaller purchases and helps you cover the transaction fees for larger purchases.
Cash-only businesses tend to be popular targets for thieves, as they have large amounts of physical money. You can reduce this risk by installing cameras and hiring dedicated security personnel. Other ways to protect your profits and the safety of your customers and employees include:
Provide employees with proper training
Implement accountability policies
Make daily deposits to reduce the total amount of money in the store you run
Invest in high-quality registers and safes
All businesses are responsible for reporting their income to the IRS. If you operate a cash-only business, it may be challenging to provide accurate records. You may be more susceptible to an IRS audit, especially if you've reported losses for several years and have income that falls below industry averages. You can overcome this challenge by maintaining accurate reports and training employees to track all transactions.
This article is for information purposes only and is not intended to constitute legal advice. Consult with an attorney or lawyer for any legal issues you may be experiencing.
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