Seasonality and the festival cycle

Almost every small business in India has a shape to its year, and almost every cash crisis happens because someone planned against the average instead of the shape. Retail and consumer businesses build towards the festival season and buy stock well before the sales arrive. Anything selling to schools or coaching centres moves with the academic calendar and goes quiet in the holidays. Agriculture and anything downstream of it moves with the harvest. Businesses selling to larger companies feel the year-end squeeze when their customers are closing their own books.

The pattern that catches people is the same in all of them: the outflow comes first. Stock is bought, staff are hired, capacity is built — weeks before the money arrives, and often on the strength of last year, which may not repeat. The worst months are therefore not the quiet ones but the ones immediately before the busy ones, and those are the months that look fine in an annual budget.

So build the year from its actual months. Take last year, week by week if you have it, and mark where money left and where it arrived. If you do not have last year, ask two people who run a similar business — most will tell you which months are hard, and they will agree with each other. Then plan the pre-season purchase against the cash you will actually be holding at that point, not against the sales you expect afterwards.