Business cash is not the same as owner cash
Revenue can look exciting before payroll, taxes, inventory, debt service and slow receivables appear. A healthy balance today may already have several jobs assigned to it.
Create a distribution gate
Before any owner draw, confirm that payroll is protected, taxes are funded, debt obligations are current, and the operating reserve is above its minimum target.
Use a rhythm
Monthly draws can work for predictable businesses. Quarterly distributions often work better for variable businesses because they allow time for seasonality and receivables to settle.
Write the rule down
The policy does not need to be complicated. A one-page note can define minimum reserve levels, tax set-asides, timing, exceptions and who approves changes.
Review after growth
More revenue often means more working capital needs, not more free cash. Revisit the policy when the company hires, expands inventory, changes margins or takes on debt.