Explore our services
  • Wealth Planning
    Receive a multigenerational wealth plan with personalized strategies and guidance.
  • Investing
    Experience a holistic approach to investing, centered on your goals and priorities.
  • Lending
    Unlock liquidity with a variety of customized lending products, strategies and solutions.
  • Banking
    Access a variety of banking products and services tailored to your needs.
  • Family wealth platform
    Explore our platform of specialized services designed for ultra-high-net-worth clients.

Learn about us

Discover our approach, digital tools and community initiatives 

Key takeaways

  • Cash-only businesses have survived into the digital age and may present lucrative investment opportunities for would-be business owners.
  • Traditional cash-only businesses include laundromats, carwashes and vending machines, although there are others.
  • These businesses are often relatively quick to set up and provide fast financial gratification to the owner. Their success and profitability will depend on careful planning, location and market demand, among other things.
  • However, there are drawbacks such as reduced customer base, increased risk of theft and higher potential for IRS audit.

Contributors

China Llanos

Digital Content Writer & Editor, J.P. Morgan Wealth Management

A cash-only business may be a great investment for someone who values a straightforward business model. In some cases, these businesses can be easy to set up or assume the operation of. They may also offer the immediate gratification of cold, hard cash in your hand.

However, we’ve also entered an age where digital payment is the preferred method of many consumers, which brings up the question: Are cash-only businesses sustainable in 2024? The answer is more complicated than a simple yes or no, but there are still many cash-only business models being run in the United States and they’re unlikely to go away soon.

Here's what you need to know if you’re considering investing in a cash-only business or if you already own one.

Popular cash-only businesses

Although many businesses around the world have adopted point of sale (POS) systems that process transactions from credit and debit to Apple Pay and sometimes even services like Venmo and Cash App, the cash-only model has survived and thrived in some specific types of businesses.

Popular cash-only businesses include:

  • Laundromats
  • Car washes
  • Nail salons
  • Vending machines

Some small restaurants and food trucks choose to stay cash-only, too, as do some small businesses that provide services such as haircuts, house painting and landscaping.

Pros and cons of owning a cash-only business

In the digital age there are surprisingly a lot of pros to owning a cash-only business. There are also drawbacks that should be taken into consideration before investing in one of these businesses.

Pros of a cash-only business:

  • Low cost (no credit card fees)
  • Fast setup (no merchant account needed)
  • Money upfront
  • No risk of credit card chargebacks

Cons of a cash-only business:

  • Potential likelihood of fewer sales due to not accepting digital payment
  • Higher risk of theft
  • Cash tracking is harder and can be subject to errors
  • Increased risk of IRS audit

Operating tips for your cash-only business

There’s a possibility that a cash-only business will attract fewer customers, depending on factors like the type of business and its location. If you believe in the viability of the business regardless – and especially if it’s one of those core cash-only businesses that people expect to pay cash to – then that’s a potential downside you may not be overly concerned with. But the extra accounting and risk endemic to cash-only businesses is something you should be well prepared for.

Here are some tips for running your cash-only business in a way that minimizes risk and maximizes profit potential:

  • Invest in POS technology or other software that can help track your transactions and reduce any errors that may occur with manual tracking
  • Otherwise, make sure you have an efficient tracking system and keep all records of sales
  • Research and install anti-theft measures and train any employees on spotting counterfeit bills
  • Put up signage around your place of business that advertises that you only accept cash
  • Think about accepting a peer-to-peer digital payment method like Venmo, which can be fee-free for the merchant and customers, or investing in an ATM for customers who don’t have cash handy. It is important to note that these payments must still be accurately reported. Always consult with a tax advisor to ensure compliance with reporting requirements

Tax considerations

Small business owners who operate cash-only businesses should be prepared to owe just as much in taxes as any other business. And they should be aware that they are at an increased risk of IRS audit, due to the higher probability of error with cash tracking and the general suspicion that cash-only business owners are more likely to hide transactions, thus, it might be useful and important for business owners to maintain meticulous records, use transaction tracking systems, and consult with a professional accountant experienced in cash-based operations.

In addition to normal income reporting, cash-only business owners must also file a Form 8300 for any cash transaction of over $10,000 that occurred that year. This form will include the customer’s information, a description of the transaction and a description of the business.1

Having an efficient cash-tracking system, maintaining relevant business records and seeking out an accountant experienced with cash-only businesses are all things that can help make filing taxes easier.

Bottom line

Cash-only businesses are still going strong in the U.S. and may be a lucrative income source for the right investor. However, there are certain risks to keep in mind when operating this kind of business, including less opportunity for sales and higher risk for theft and audit.

The right investor for a cash-only business may be someone who appreciates a traditional, no-frills business model, and has software or employees that can streamline the cash-tracking and tax-filing process.

FAQs

Do cash-only businesses pay less in taxes?

No. Cash-only businesses have the same tax liability as businesses that accept other methods of payment.2 3

Is it difficult to run a cash-only business?

Running a cash-only business may be more or less difficult depending on how each business owner views it. Some aspects are objectively easier, such as not needing a merchant account to process transactions and not needing to pay credit card fees. Other aspects may be harder, such as tracking the cash transactions and preventing theft. A business investor must assess these pros and cons before deciding if a cash-only business is right for them.

References

1.

IRS.gov, “Form 8300 Reference Guide.” (March 2024).

2.

IRS.gov, “Form 8300 Reference Guide.” (March 2024).

3.

J.P. Morgan Wealth Management, “How to prepare for Tax Day as a small business owner.” (March 2024).

Connect with a Wealth Advisor

Our Wealth Advisors begin by getting to know you personally. To get started, tell us about your needs and we’ll reach out to you.

Connect now

IMPORTANT INFORMATION

This material is for informational purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.


GENERAL RISKS & CONSIDERATIONS. Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan representative.

NON-RELIANCE. Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

Legal Entity and Regulatory Information.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

This document may provide information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC (“JPMS”). The agreements entered into with JPMS, and corresponding disclosures provided with respect to the different products and services provided by JPMS (including our Form ADV disclosure brochure, if and when applicable), contain important information about the capacity in which we will be acting. You should read them all carefully. We encourage clients to speak to their JPMS representative regarding the nature of the products and services and to ask any questions they may have about the difference between brokerage and investment advisory services, including the obligation to disclose conflicts of interests and to act in the best interests of our clients.

J.P. Morgan may hold a position for itself or our other clients which may not be consistent with the information, opinions, estimates, investment strategies or views expressed in this document.  JPMorgan Chase & Co. or its affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer.

Business

Incentive stock options and the AMT

Dec 19, 2024

Incentive stock options can provide tax benefits, but without proper planning, those benefits can be diminished.

Read more
1016772350

Business

Understanding business entities

Dec 05, 2024

If you have a business or are thinking about starting one, you’ll have to decide how you want to structure it. Your answer may differ depending on your particular goals – like asset protection, tax efficiency, or ease of transitioning your business to family members.

Read more
2 men in an office speaking banner

Business

Creating a cash runway for your startup

Dec 03, 2024

Strong cash management is essential for any business. For startups, achieving an adequate cash runway is critical to survival.

Read more
people in a meeting banner

Business

Developing a change management framework for treasury

Nov 22, 2024

To effectively support the enterprise in a rapidly shifting business landscape, treasury must adopt a cohesive change management framework. Here’s how.

Read more
2 people looking at laptop banner

Business

Treasury’s role in building a ‘culture of resiliency’

Nov 18, 2024

Global challenges and uncertainties are hitting businesses faster and harder than ever before. Treasury must deliver quick, decisive responses that build resilience to these risks.

Read more
Bernard Williams banner

1:16 - Business

Building a great business leader: Why mentorship matters

Oct 25, 2024

Learn from diverse business owners about why great mentors are behind every great business leader.

Watch video

Business

Business succession planning: Valuing your business

Sep 12, 2024

Understand the basics of business valuation and how it can help you make better-informed decisions as your company grows and you get closer to succession.

Read more
1339459004

Business

The importance of business cash management

Aug 28, 2024

Managing cash effectively is a key ingredient to business success. Discover more about planning for seasonal fluctuations and optimizing the returns on your business cash.

Read more

Check the background of our firm and investment professionals on FINRA's BrokerCheck

To learn more about J. P. Morgan’s investment business, including our accounts, products and services, as well as our relationship with you, please review our J.P. Morgan Securities LLC Form CRS and Guide to Investment Services and Brokerage Products.

This website is for informational purposes only, and not an offer, recommendation or solicitation of any product, strategy service or transaction. Any views, strategies or products discussed on this site may not be appropriate or suitable for all individuals and are subject to risks. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor's own situation. 

This website provides information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC ("JPMS"). When JPMS acts as a broker-dealer, a client's relationship with us and our duties to the client will be different in some important ways than a client's relationship with us and our duties to the client when we are acting as an investment advisor. A client should carefully read the agreements and disclosures received (including our Form ADV disclosure brochure, if and when applicable) in connection with our provision of services for important information about the capacity in which we will be acting.

INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Please read additional Important Information in conjunction with these pages.