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Why run a cash-based business in 2023?

Why not?

The tussle between which is best between handing over a bill and swiping a card intensifies daily as modern technology advancements continue to revolutionize the fin-tech sector. While some think cash will always be king, others believe a cashless policy is the future.

This piece examines the pros and cons of running a top cash business in 2023.

But first,

What’s a Cash-Only Business?

A cash-only business is any type of business that receives only cash as payments from its customers. Customers are expected to only present physical currency like notes and coins (where applicable) to receive goods or services.

Although most profitable business ideas might be run as cash-only, it is common to find businesses that require dealing with customers one-on-one to be cash-only.

The following, amongst many others, are some common examples of top cash businesses:

  • Pet grooming and cleaning services
  • Delivery businesses
  • Restaurants
  • Laundromats
  • Pawn shops
  • Event ticketing services
  • Transportation services
  • Vending machines

Pros of Running a Cash-only Business

A cash-based business is likely to enjoy the following benefits in 2023.


Cash-only business transactions are straightforward: the customer hands the cash over and receives their commodity, or vice versa, depending on the business. The advantage here is that the business keeps things simple for itself and the customer —- everybody’s happy.

Cash-only businesses enjoy business simplicity in the following ways:

  • Straightforward bookkeeping
  • Customer maintains anonymity
  • Little to no training-free
  • It facilitates quick payments


With simplicity comes speed. Since the transactions are straightforward, all business processes take less time. For instance, the business doesn’t have to spend more time tracking the payment methods of each customer instead of simply counting cash.

Setting up and maintaining all payment-related business processes for a cash-only business takes significantly less time than for cashless businesses.

Other ways in which running a cash-only business speeds up the business process include the following:

  • Little waiting period
  • No merchant account setup hassle
  • No connectivity dependence
  • Little or no admin tasks for reconciling electronic transactions

Minimized Digital Vulnerabilities

The lack of electronic payment processing in cash-only businesses means there’s one-less cybersecurity threat. As a result, the business is less prone to cyber fraud and malicious attacks aimed at accessing and extorting sensitive customer data.

The best part is that the business effectively protects one of the most important aspects of its data — finances — by accepting cash only.

Cash-only businesses have minimized digital vulnerabilities due to the following reasons:

  • Little or no chargebacks
  • Low risks of Identity theft
  • Low risks of payment fraud
  • Customer anonymity

Cons of Running a Cash-only Business

A business that accepts cash only as a mode of payment might be exposed to the following:

Lower Customer Satisfaction

Digital natives and millennials today prefer digital payment options. This is evident because cash has become a less popular payment method than credit cards, debit cards, and other digital and mobile wallets. These statistics point to the fact that fewer customers prefer to use them.

As a result, opting to run a cash-only business might mean a business would deliver lower customer satisfaction, affecting the business’ overall bottom line.

The following are some reasons why running a cash-only business leads to lower customer satisfaction.

  • Limiting the customer base
  • Customer’s inconvenience and security concerns
  • Most competitors offer digital payment options

Higher Potential for IRS Cash Reporting

Not reporting cash income is commonly associated with cash-only businesses in 2023, or so the IRS thinks. So, they make it a point of duty to audit these businesses more often than cashless businesses.

The business might have nothing to hide because it’s honest and law-abiding. But how about errors or unfaithful employees? This means businesses will need to train employees on accurate cash handling.

On top of that, IRS cash reporting and audits can be very dull and nerve-wracking, taking up valuable time that’s supposed to be spent working on the business.

Cash-only businesses have a high probability of not reporting cash payments to the IRS due to the following reasons:

  • Lack of paper trail
  • Employee unfaithfulness and mistakes
  • Inconsistent record keeping

High Susceptibility to Theft

While a business might minimize its digital vulnerabilities by accepting cash only, there’s still the challenge of robbers and burglars carting away the money.

What such businesses save by avoiding processing fees and other overhead costs they might have to pay in terms of getting extra security officials.

Other forms of security concerns associated with a cash-only business include the following:

  • Skimming
  • Unrecorded sales
  • Cash-handling errors
  • Counterfeit currency fraud


While running a cash-only business in 2023 offers speed, simplicity, and low overhead cost, it also opens the business to risks of security threats, lower customer satisfaction, and a higher frequency of IRS audits.

There is no verdict.

So, to run a cash-only business or not? The answer to that question depends on the business and customer needs.

The Next Step in Cash-Based Business Analysis

Having explored the nuances of operating a cash-based business in 2023, including the benefits of simplicity and speed as well as the challenges like lower customer satisfaction and higher IRS scrutiny, a crucial follow-up question arises: how do you verify the income of such a business?

In the pursuit of financial transparency and due diligence, especially for investors or potential buyers, the ability to accurately assess the income of a cash-only enterprise is paramount. Our next article, "How To Verify The Income Of A Cash-Only Business", provides a deep dive into the techniques and tools necessary for this task.

From understanding the intricacies of cash flow in an environment that shuns digital transactions to implementing robust accounting measures, we lay out a step-by-step guide to ensure you're making an informed decision. Whether you're an entrepreneur, an investor, or a financial analyst, mastering the art of income verification in cash-based businesses will equip you with the knowledge to navigate this less transparent financial landscape.

Join us as we move from the strategic considerations of why to run a cash-only business to the practical execution of verifying its income. Ensure your investment is sound and the business you're dealing with, or running, is as profitable as it claims to be.

[Proceed to the article, How To Verify The Income Of A Cash-Only Business, for comprehensive insights and guidance on ensuring the financial integrity of cash-driven ventures.]

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