The Highs and Lows of a CASH ONLY Business Model

There is a lot of controversy around restaurants not accepting cash, but what about those that only accept cash? Yes, it’s still done. You’ll see cash only business models mainly with family-owned smaller establishments and food trucks. There might be an ATM inside the restaurant or nearby so that those that are not prepared can get some money quick.

The Highs:

Cash is Fast. You’ll be able to serve your clientele quickly. There’s no risk of technology failing or credit card machines malfunctioning. Make sure there’s a sign at the front door, at the cash register and that your servers remind guests that you are ‘cash only’. You’ll be able to serve people more quickly and easily by accepting this easy form of payment.

It’s Easy to Hire Severs. Ending a shift with a fistful of cash is very appealing. Students and people that need a little extra part-time work and instant cash flow will be eager to work for you.

It’s Profitable. You’ll avoid the credit card transaction fees that are taken from each transaction. You’ll also save on the cost of leasing or buying credit card equipment.

Cash is Inclusive. All demographics do not have equal access to credit cards, debit cards and mobile payments. There is a segment of the population that lives in a cash only world. By offering a cash only environment you may be offering an option that they can afford as well.

Check out the 2017 Consumer Payment Study to learn about emerging forms of payment and utilization of all forms of payment.


The Lows:

Cash is Easy to Lose. You’ll have to be vigilant about closing out at the end of the night and securing your money. It can be easily misplaced. You’ll need a protected safe to secure cash and a process of getting it to the bank.

Cash is Easy to Steal. Staff might be tempted by seeing the cash float by and think ‘they won’t miss $50’.  Or staff might not ring up every sale pocketing the proceeds of an unrecorded order. To avoid this, you’ll have to have a zero tolerance policy and terminate any staff that steals, with no exceptions, on the spot.

You Might Get Robbed. No one wants to be on the other end of a gun pointed at them. A cash only business can attract criminals looking for an easy target.

Your Risk of an Audit Increases. The IRS will be more suspicious of a business with less controls. Your accounting process will have to be flawless. Counting cash and staying on top of paper transactions is time consuming. Audits are painful.

One option to consider is accepting cash only on extremely business days. When there’s a Bears game or Lollapalooza comes to town, many of the restaurants and bars in the Chicago area will post a hand written sign in the window stating ‘cash only’. This is usually appreciated by all as it’s pretty much impossible to get in anywhere. Accepting cash only also facilitates crowd control.

When a business is first starting out in a food truck or with one location accepting cash only might be the way to go. However, the enterprise will not grow beyond the initial location until you start accepting all forms of payment and bring in more sophisticated processes.


  • Subscribe to our latest insights


Are you capital raise ready?