Nowadays, a lot of people seem to be interested in a cash only business model. 

There are some advantages to formulating your side hustle or local business this way—and hey, who doesn’t love cash, right? 

Selling your goods, products, or services on a purely cash basis definitely poses a few immediate and tangible benefits. 

However, it also comes with some downsides. And some of those downsides can really stifle your business’s ability to grow, scale, and thrive. 

And in this post, you’re going to learn about five disadvantages often associated with cash only businesses. 

If you’re trying to decide whether or not to make your business strictly cash-based—this post will help to give you some clarification about what’s best. 

Let’s dive into it. 

1. It’s Harder To Keep Cash Safe

Storing large amounts of cash at your home or place of business is just risky. 

This is especially true if you don’t have some kind of security service

Keeping your company’s valuable capital safe is crucial to the success of your business. 

Your capital is literally the lifeblood of your company!

Therefore, you may want to opt for less ‘strictly cash’ business so that you can explore a safer outlook for capital storage.

Cash is generally a lot safer in the bank than it is in your pocket or cash-register.

2. Cash-Only Can Be Less Convenient

On one hand, cash is super convenient. 

Someone pays you in cash, you give them change, and boom—the transaction is complete. 

No fuss, no muss, right? 

Well, that’s partly true. 

But there’s also another side to it. 

In some ways, cash is also a little bit inconvenient

For example, not everyone carries cash all the time. 

Also, it’s more difficult to pay in cash over distances. 

You also can’t process cash-only deals online (which really hinders your ability to reach a wider client base via website, social media, etc). 

In other words, nowadays, it really does pay to be able to accept payment in other forms as well.

3. It’s Less Efficient

There’s also an inconsistency to pure cash payments. 

For example, you need to keep change on hand. 

This can cause you to have to take extra trips to the bank just to make sure you’ve got rolls of quarters, dimes, and nickels to spare. 

It may also be less convenient because it’ll require regular trips to the bank for deposits. 

That’s a lot of extra driving around that you’ll need to do in-person. 

Sure, cash is nice—but it’s definitely not going to pack itself up and walk to the bank for you.

4. Not Everyone Carries Cash

We already touched on this once—but it bears repeating. 

Nowadays, fewer and fewer people actually carry cash on their person. 

People are far more likely to want to pay with things like a credit card, a debit card, or even CashApp

Therefore, you may actually miss out on business if you try to sell goods or services strictly on a cash basis.

5. It Takes More Work To Track Your Income

One of the great things about electronic payments is that they tend to help you create a cash flow record that makes record keeping (both for your books and for taxes) a lot easier. 

With cash, however, you need to create this record keeping system yourself. 

You may need to handwrite invoices, or even input those invoices into some kind of computer program to help you keep track of where the cash is coming from and going. 

Over time, this extra effort can add up. 

Eventually, it may get to the point where it’s just too much extra work to justify on a regular basis. 


These five disadvantages to cash only businesses may or may not fall on your radar is being particularly serious. 

Every business is different. 

With that being said, you may want to do a quick cost-benefit analysis to figure out exactly whether or not being cash-only actually helps or hinders your business. 

You may want to opt for a hybrid system, where you accept cash and a couple other forms of payment as well—just in case.

This can often really help to mitigate some of the disadvantages that cash only businesses face, and help you to build a business that’s better equipped to handle modern problems and challenges than a business that only deals with cash transactions.