Liquidity in Business: The Moat That Protects You
- James C Foo Leong
- May 5
- 2 min read
We often judge financial strength by size—Revenue, reputation, reach.
But when pressure hits, not every fortress holds.
In Chapter 3 of Once Upon a Balance Sheet, we unpack a different kind of strength—the quiet kind that keeps a business standing when the tide turns.
The Castle Metaphor
Imagine your business as a castle.
Solid walls. Impressive towers.
But true strength doesn’t come from what you can see.
It comes from what protects you when the unexpected arrives.
That’s the moat.
And in finance, that moat has a name: liquidity.
What Is Liquidity?
Liquidity is your breathing room.
It’s the cash, savings, or near-cash assets you can access quickly—without panic or painful decisions.
It’s about flexibility and having options when it matters most.
Why Liquidity in Business Matters
When a business has liquidity, it:
Buys time
Creates calm
Avoids fire sales or reactive cuts
Protects its core when the external world shakes
You don’t build a moat during a siege.
You build it before.
So when pressure comes, you can respond—not scramble.
That’s why understanding liquidity in business is a survival skill.
It keeps you in the game.
What Counts as Liquid?
These are assets that don’t just exist on paper—they’re there when you need them:
Cash in the bank
Savings accounts
Treasury bills
Short-term deposits
Money market funds
Liquidity is about accessibility.
Reflection Prompt
What does your financial moat look like right now?
Here are three questions you can ask to check your liquidity:
How quickly could I access cash if I needed it this week?
Would I need to sell something—or can I tap into ready resources?
Do I know the actual amount of liquid assets I have today?
If nothing came in for three months—what would hold?
Could you breathe?
Could you choose wisely, rather than react?
What could you do today to reinforce your breathing room tomorrow?
Closing Thought
Strength isn’t always loud.
Sometimes, it’s having enough space to pause—and decide wisely.
That’s the power of liquidity.
That’s how strong businesses stay standing—from the inside out.
James
The Financial Storyteller
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