Why Are There Cash-Only Businesses? 

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cash only businesses

It might seem crazy that in today’s digital age, people want to start a cash-only business. But there are business owners out there who create businesses that require customers to pay with cash only. 

We’ve rounded up the details on cash-only companies so you can weigh the pros and cons of opening a cash-only business. Does a cash-only business model oversimplify businesses or make them even harder to operate? Let’s find out! 

What is a cash-only business?

People often start cash-only businesses when they need money fast. Cash-only companies require customers to only pay in cash, meaning they do not allow loans, trades, credit, debit, or IOUs. It’s a great way to have an income stream upfront. 

There are a lot of positives as well as negatives of running a cash-only business. The positives are typically in favor of business owners because cash-only businesses simplify the payment process, while the negatives often rest on the shoulders of the customers. This is because customers have limited payment options, making the buying process more challenging for them. 

Why would a business be cash only?

Oftentimes, cash-only businesses start as informal businesses. Initially, the business starts small, but eventually, the owners realize they want to avoid the red tape, paperwork, and applications associated with a traditional business. People who own and operate cash-only businesses often like the simplified appeal of a cash-only business, so they venture down that path. 

12 examples of cash only businesses

The best cash-only business is the one that you’re passionate about. Here’s our list of cash-only business ideas to use as jumping-off points when thinking of the type of cash-only business you want to open!

  1. Baker. Has a friend ever asked you to bake a cake or decorate cookies for them? If so, take your talent and turn it into a great cash-only business opportunity. 
  2. Coffee cart. A coffee cart in the right area can produce a lot of revenue. It is also less risky than a full-scale coffee shop. 
  3. Delivery or transportation service. Do you find yourself in the car a lot? Do you love helping people? A delivery service could be perfect for you. 
  4. Farmstand or nursery. People with a green thumb excel at operating farm stands. Try growing a few things and selling them nearby to see how you like it. 
  5. Flea market or craft show vendor. Flea markets and craft fairs are the perfect time to start making money off of your homemade goods. 
  6. Lawn services. Lawn and gardening services are perfect for the outdoorsy types. 
  7. Elder or babysitting. Have a caring side? Elder care and babysitting can be done in your own home, and these experiences are very rewarding.
  8. Pet sitting or dog walking. Animal lovers rejoice! You can turn your passion of caring for animals into a cash-only business. 
  9. Auto detailing. This one can be very profitable! Give auto-detailing a whirl. 
  10. Landscaping and gardening. Do you love taking care of plants and designing outdoor spaces? Give gardening a try!
  11. Handyman. Do you find yourself fixing everything around the house? People will pay you in cash to do handy work in their houses, too!  
  12. Food truck. Food trucks allow you to run your own business with less risk than full-on restaurants or storefronts. 

Why a cash only business is beneficial

Cash-only businesses simplify the payment process, which yields a lot of advantages for business owners. 

Receive money fast 

Once a customer hands the cash over to you, your company immediately receives money from the transaction, meaning there’s no waiting period. Credit card transactions, on the other hand, can take weeks to process. 

No credit card fees

Credit card transactions impose a lot of fees. For starters, you have to buy equipment in order to process credit cards as a business. And every time a customer swipes their card, a fee is attached to the transaction, but you’ll alleviate these expenses by running a cash-only company. 

No credit card fraud

When someone uses a fraudulent credit card to make a purchase from a business, credit card companies require the business to refund the money. This is called a chargeback, and it costs the business money. But with a cash-only business, you’ll eliminate ever having to deal with fraud. 

Drawbacks of a cash-only business  

Cash is not the most common way by which people pay for things, and that detail is at the core of many of the drawbacks listed below. 

Inconvenient for customers

If you don’t accept your customers’ preferred payment method, then they might not want to make a purchase. This hurts your bottom line. So, think about your ideal demographic and make sure you’re not alienating them by only accepting cash.  

Security risk

Keeping a lot of money on hand can ultimately be a considerable risk. What if you get robbed? How do you keep track of it all? Think through the security of a cash-only business before you go down this route. 

Likely to have an IRS audit

It’s harder for the IRS to keep track of your money because cash doesn’t always leave a digital footprint. In other words, cash-only businesses do not often have a paper trail. The IRS often targets these businesses and audits them because they believe cash-only businesses omit money from their financial records since it’s easy for them to do so. 

MoneyLion helps you manage your money to achieve your goals

Have you thought about starting a business but you don’t know where to start? A simple small business that only accepts cash might be right for you. Cash-only businesses result in fewer risks for business owners, and oftentimes, your customers will understand why your small business has this policy in place. 

If you’re having trouble getting your business off the ground, MoneyLion can help. MoneyLion offers investment accounts for people who are saving up money to put towards their cash-only businesses. Invest this money for your future business goals with MoneyLion! 

Our personalized portfolio allows you to personalize your risk level. This means your money is invested at the level of risk that you are comfortable with, and we’ll take the guesswork away from investing for you. Try MoneyLion auto-investing today!


Are cash only businesses legal? 

Yes! Cash-only businesses are legal. Make sure they are right for you by reading about the pros and cons before opening a cash-only business of your own.

Do businesses prefer cash?

Businesses often prefer to be paid cash because they have to pay fees on credit card transactions, whereas cash payments don’t incur any charges for the business owners.

Do cash only businesses pay taxes?

Yes. Here are some tips from the IRS that cash business owners should know about and understand.

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