Diwali Ke Baad” – A Pause Button for SMEs

Just before “Diwali Duration,” ask any SME business owners:

• What’s your strategy for scaling up operations during Diwali – are you planning to hire new talent?
• With Diwali around the corner, have you mapped out any major investments?
• Are you planning to launch that new product this quarter?
• Have you thought about boosting your marketing efforts during Diwali?
• What’s your plan for optimizing cash flow and managing expenses?
• As the year winds down, are you focusing on hitting your quarterly targets?

The most common answer will be “Diwali Ke Baad.” It reflects a tendency for businesses to postpone crucial decisions until the festival ends.

Why does Diwali become a bottleneck to any new start, and why are critical decisions delayed until after the celebrations wrap up?

It’s the time of year when India is gearing up for Diwali, and the excitement is palpable, but for many Small and Medium Enterprises (SMEs), this season also brings a tendency to press the “pause button” on key business decisions. Ask any business owner just before the Diwali season about their plans for the next quarter, and the most common response you’ll hear is, “Diwali Ke Baad.” This phrase has become a default setting for many business owners, reflecting an ingrained habit of delaying important initiatives until after the festivities. While understandable, this mindset can hold businesses back, leading to missed opportunities and lost momentum.

Why Diwali Becomes a Barrier to New Starts

For Indian SMEs, Diwali is a peak sales season, with customer engagement at its highest and the opportunity to capitalize on festive spending at its fullest. Here are some common reasons why Diwali becomes a roadblock for many SMEs:

1. Distraction from Day-to-Day Operations: Employees take pre-planned holidays, the focus shifts to bonuses, and the general festive mood leads to a dip in organizational productivity.
2. Delayed Payments: Many clients, too, tend to delay payments during this period, adding to financial stress.
3. Vendor Pressure: On the flip side, vendors push for quicker payment clearances, tightening cash flow even further.
4. The Comfort Zone: Postponing decisions allows business owners to stay within their comfort zone, avoiding risks when the focus is on immediate festive gains.
5. Cash Flow Pressures: The period often comes with financial strain, as businesses have to manage bonuses, gifts, and other festive expenses.

Instead of leveraging this time to push forward, many businesses choose to wait until the celebrations are over, potentially hampering their long-term growth.

The Effects of Delayed Decisions - Diwali or Diwala?

The festive period, when managed poorly, can lead to what some entrepreneurs jokingly call “Diwala” (bankruptcy). This occurs when businesses become overly reliant on Diwali sales, neglecting the need for continuous momentum throughout the year. For India’s SMEs, delaying until ‘after Diwali’ is like hitting pause on growth.

Lost Momentum and Missed Opportunities

SMEs that press pause risk falling behind competitors who continue to innovate and move forward during this time. A lack of action means missed chances to launch new products, expand into new markets, or take advantage of seasonal demand.

The Cost of Inaction

Financially, waiting means potential revenue is delayed, and client relationships may suffer if businesses aren’t able to respond quickly to market needs. Operationally, postponing hiring or investment can create bottlenecks later on, making it harder to catch up after the festival ends.

Why Businesses Shouldn't Depend Only on Diwali Sales

Diwali may be a critical sales period, but it’s not the be-all and end-all for SMEs. Relying solely on Diwali sales to meet annual targets is a risky strategy. In fact, many businesses see the festive period as a double-edged sword—while sales might peak, operational issues like cash flow management, manpower shortages, and logistical hiccups can easily offset these gains if not handled well. However, those that plan and prepare ahead of time often see a significant improvement in their Q4 performance, setting them up for a strong end to the year. A month of inaction means missing out on this vast potential, especially in sectors like retail, textile, e-commerce, and manufacturing, where Diwali sales play a crucial role.

Inaction also means delaying payments from clients, which creates a domino effect. SMEs struggle with working capital and are unable to pay their vendors or invest in raw materials for the next production cycle.

Why SMEs Must Stay Proactive Beyond Festive Seasons

The “Diwali Ke Baad” mindset needs to be challenged. Entrepreneurship isn’t about waiting for the right time—it’s about creating the right time. Here’s why SMEs must stay proactive:

1. Consistency is Key: The best businesses don’t wait for the perfect moment to act. They maintain a steady pace of operations and decision-making throughout the year, ensuring that their momentum carries them through festive seasons.
2. Plan Ahead: Businesses that plan for Diwali well in advance, whether it’s ramping up production, securing working capital, or preparing sales or marketing strategies, are the ones that thrive during and after the festive period.
3. Stay Agile: Flexibility is critical. Businesses should be able to adapt to changes in the market, customer demands, and operational needs, even during Diwali. By staying agile, SMEs can capitalize on opportunities that others may overlook.

Building the Mindset of "Diwali Ke Pahle"

“Diwali Is Not the End—It’s Just the Beginning!” For SMEs, Diwali should be a time of action, not inaction. The true spirit of entrepreneurship lies in consistency and resilience, not waiting for the right moment. By staying proactive, making timely decisions, and preparing for the future, businesses can ensure that their post-Diwali period is not a time for catching up but for pushing ahead.

So, what’s your next move? Don’t wait for “Diwali ke baad”—the best time to act is now.

Stratefix Consulting, a leading business consultant company offering consultancy services in India, has been helping SMEs stay proactive and thrive throughout the year, not just during Diwali.