Hi I am 33 years old have a kid 2 year old. Me and my brother are in the same business. Its a seasonal business of stoles and kurtis. We mostly do job work. Turnover is around 1.25Cr and emis are 1.5L per month. We both arent able to save any money. We are always broke. If we check on paper we are making prifit but we dont where the money is going. Been doing business for 10 years now. Things were smooth till covid but after that its been downhill. I have orders. But no return. What should I do?
Ans: Running a family business with seasonal income is tough.
You’re 33, have a 2-year-old child, and handle business with your brother.
Turnover is Rs 1.25 crore yearly, but you’re still struggling with cash.
EMIs are Rs 1.5 lakh monthly, but you feel broke every month.
Though you’re making profit on paper, there’s no visible cash return.
This is a common problem in many small businesses.
Let’s now understand and restructure it with a 360-degree approach.
Know the Real Problem First
Your business shows profit but no cash.
This is a cash flow issue, not just profit issue.
Possible reasons:
Customers not paying on time
Too much money stuck in inventory
High credit to customers
Low margin despite high turnover
High fixed costs and personal withdrawals
EMI outflows not synced with income
You need to separate profit from cash flow.
And build control over every rupee.
First Fix: Separate Personal and Business Money
You and your brother must stop mixing accounts.
Have separate bank accounts
One for business, one for personal
Pay yourself a fixed salary monthly
Avoid direct personal spending from business
This step brings clarity.
You’ll see clearly how much money the business truly keeps.
Second Fix: Create a Business Budget
Don’t run operations without numbers.
List fixed monthly expenses: rent, salaries, EMI, utilities
Mark out seasonal expenses like fabric or transport
Track peak and lean months
Allocate money month by month
Break your Rs 1.25 crore into monthly inflow plan
This helps avoid surprises.
Also helps plan purchase and credit well.
Understand Where the Money Is Going
Do a 12-month cash flow audit.
You’ll see:
Where cash comes in
Where it goes out
How much is stuck in stocks
How much is with customers
What EMIs or interest is eating your profit
Most likely, your profit is going into inventory and credit.
Set Strict Customer Payment Rules
In seasonal business, timely customer payments matter most.
Don’t give credit without timeline
Offer small discounts for early payments
Keep payment follow-up strict and regular
Use digital tools to track pending invoices
If customers pay late, your entire cycle collapses.
Your money is in their hands, not yours.
Review Your EMI and Loan Structure
Rs 1.5 lakh monthly EMI is very heavy.
Ask these questions:
Can you refinance to longer term?
Can you get working capital loan instead?
Are you using EMI money for capital asset or daily expense?
Are you servicing loans from personal savings?
Many times, business loans taken emotionally create long-term stress.
Structure them clearly with a planner.
Inventory Is Silent Enemy
Clothes, fabrics, stoles, and kurtis pile up fast.
Too much stock locks up cash
You see profits in books, but cash is stuck in goods
Unsold stock hurts margins
Do an inventory health check:
What sells fast?
What sits for months?
Which items give real profit?
What designs are dead stock?
Don’t buy new stock unless old one sells.
Work on a lean inventory model.
Move from stock-based to order-based model if possible.
Take Salary Like an Employee
You and your brother must draw regular salary.
Fix monthly salary for each
It brings discipline and fairness
Avoids emotional withdrawals
Ensures business pays you—not drains you
Any bonus or profit should be once a year. Not random.
Cut Personal Lifestyle Leakage
If personal expenses are high, business suffers.
List all personal outflows
Reduce wasteful lifestyle habits
Live like a salaried person
Don’t increase lifestyle when sales go up
Also avoid using business credit for personal gadgets, trips, or loans.
Work on Increasing Margins, Not Just Sales
Turnover is Rs 1.25 crore. That sounds big.
But if margins are thin, you get no benefit.
Focus on:
Higher margin products
Value-added work (like custom orders)
Bulk orders that pay upfront
Lowering costs through better suppliers
Don’t run after more orders blindly.
Run after profitable and paid orders only.
Introduce a Basic Accounting System
If not using one, adopt digital books.
Tally, Zoho Books, QuickBooks, or Marg software
Track income, expenses, stock, and customer dues
Reconcile bank accounts every month
Even better, hire a part-time bookkeeper.
Let numbers guide you—not gut feeling.
Create a Business Emergency Fund
Businesses also need a buffer. Like personal savings.
Try to build Rs 3–5 lakh in business reserve
It should sit in separate account
Don’t touch it for stock or expenses
Use only in real emergency
This gives peace and protects business during slow months.
Engage with a Certified Financial Planner
You’re in business.
But personal finances matter too.
A Certified Financial Planner helps with salary planning
Helps set up your SIPs, retirement, kid’s education fund
Can also structure loans better
Gives you a business-personal plan
Your future needs a balance between business and personal wealth.
Don’t Use Index Funds or Direct Funds Now
If you’re thinking of investing:
Avoid index funds – no protection during crash
Avoid direct mutual funds – no advisor support
You’re already busy with business
You need a regular plan via a CFP-backed MFD
That brings discipline and guidance
Right now, clearing business mess is priority.
Then start small SIPs through professional support.
Simple Steps to Start From This Week
Open separate business and personal accounts
Track all money in and out for next 30 days
Speak to CA about EMI or loan restructuring
Do stock check – list what’s moving, what’s not
Start Rs 5,000 monthly SIP with planner, if possible
Fix personal salary for both you and brother
Build Rs 1 lakh cash reserve in 6 months
Start with action. Not emotion.
Finally
You’re not alone. Many small business owners are in the same trap.
You’ve been working for 10 years. That shows strength.
Now it’s time to bring structure. Discipline. Clarity.
With small changes and a monthly plan, things can improve.
Remember: turnover means nothing without cash in hand.
Run your business with control. Live your personal life with goals.
Keep them separate. And give your family a future of freedom.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
