{"id":869224,"date":"2026-08-11T10:55:55","date_gmt":"2026-08-11T08:55:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=869224"},"modified":"2026-08-11T10:55:58","modified_gmt":"2026-08-11T08:55:58","slug":"cash-flow-or-finding-customers-which-problem-should-you-solve-first","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/industry-news\/869224\/cash-flow-or-finding-customers-which-problem-should-you-solve-first\/","title":{"rendered":"Cash Flow or Finding Customers? Which Problem Should You Solve First?"},"content":{"rendered":"\n<p><strong><em>By Chad Tessendorf, Head of Sales at GoTyme Bank<\/em><\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Many entrepreneurs believe they need more customers. In reality, they may need better cash flow. Understanding the difference could determine whether your business grows, or simply grows more vulnerable.<\/p>\n\n\n\n<p>Ask almost any entrepreneur what their biggest challenge is, and the answer is likely to be the same:&nbsp;<em>finding more customers.<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/gotyme.co.za\/business?utm_source=BroadMedia&amp;utm_medium=Article&amp;utm_campaign=August2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Click here for more info about GoTyme Bank<\/strong><\/a><\/li>\n<\/ul>\n\n\n\n<p>It\u2019s an understandable response. Customers generate revenue, revenue fuels growth, and growth is often seen as the ultimate measure of business success. Yet this assumption can lead entrepreneurs to focus on the wrong problem.<\/p>\n\n\n\n<p>While attracting new customers is essential, it is not always the factor holding a business back. For many small and medium-sized enterprises (SMEs), the more pressing challenge is managing cash flow, ensuring there is enough working capital to operate, invest and respond to opportunities as they arise.<\/p>\n\n\n\n<p>While revenue and profitability are critical indicators of business performance, financial experts have long argued that liquidity is what determines whether a business can continue operating.<\/p>\n\n\n\n<p>Harvard Business School professor William Sahlman notes that entrepreneurs often place too much emphasis on projected profits and too little on the factors that determine whether a business can survive and adapt over time (Sahlman, 1997).<\/p>\n\n\n\n<p>For growing SMEs, cash flow is often the practical constraint that determines whether opportunities can be converted into sustainable growth. This distinction is especially relevant in South Africa, where SMEs operate in an environment characterised by rising operating costs, inflationary pressures, delayed customer payments and constrained access to finance.<\/p>\n\n\n\n<p>The question, then, is not whether customers matter.<\/p>\n\n\n\n<p>The question is whether finding more customers is solving the right problem.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Revenue is not the same as cash<\/h2>\n\n\n\n<p>One of the most common misconceptions among business owners is that increasing sales automatically improves financial health.<\/p>\n\n\n\n<p>In practice, the relationship is far more complex.<\/p>\n\n\n\n<p>A business may secure several new contracts in a single month, but if customers pay 30, 60 or even 90 days later, the business must still cover salaries, rent, inventory, supplier payments and operational costs in the meantime.<\/p>\n\n\n\n<p>The business may appear profitable on paper while simultaneously experiencing severe cash constraints.<\/p>\n\n\n\n<p>This challenge is particularly common during periods of rapid growth. Economists often refer to it as&nbsp;<strong>overtrading<\/strong>, a situation where a business grows faster than its available working capital. Rather than strengthening the business, growth begins to strain it.<\/p>\n\n\n\n<p>The Organisation for Economic Co-operation and Development (OECD) notes that insufficient working capital remains one of the most significant barriers to SME sustainability and expansion across both developed and emerging economies (OECD, 2023).<\/p>\n\n\n\n<p>Growth is valuable, but only if the business has the financial capacity to support it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">When more customers create more pressure<\/h2>\n\n\n\n<p>At first glance, it seems logical that more customers would solve financial challenges.<\/p>\n\n\n\n<p>However, every new customer usually requires additional resources.<\/p>\n\n\n\n<p>More inventory.<\/p>\n\n\n\n<p>More staff.<\/p>\n\n\n\n<p>More production.<\/p>\n\n\n\n<p>More logistics.<\/p>\n\n\n\n<p>More customer support.<\/p>\n\n\n\n<p>These costs are incurred long before payment is received.<\/p>\n\n\n\n<p>Imagine a catering company that wins a contract to service a large corporate event. It needs to purchase ingredients, schedule additional staff and arrange transport weeks before receiving payment.<\/p>\n\n\n\n<p>Winning the contract is a commercial success, yet without sufficient cash flow the business may struggle to fulfil it. The same principle applies to retailers preparing for seasonal demand, manufacturers purchasing raw materials and service businesses expanding their teams.<\/p>\n\n\n\n<p>Growth creates opportunity, but it also increases financial commitments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Cash flow gives businesses choices<\/h2>\n\n\n\n<p>Cash flow is often misunderstood as simply having money in the bank. In reality, it represents something more important.<\/p>\n\n\n\n<p>It creates flexibility.<\/p>\n\n\n\n<p>Businesses with healthy cash flow can negotiate supplier discounts for early payment, invest in new equipment, recruit skilled employees, respond to unexpected expenses and pursue new market opportunities without disrupting daily operations.<\/p>\n\n\n\n<p>Conversely, businesses experiencing cash flow constraints often become reactive. Strategic decisions are delayed, investment opportunities are missed and management attention shifts from growth to survival.<\/p>\n\n\n\n<p>The International Finance Corporation estimates that the global financing gap for micro, small and medium-sized enterprises exceeds&nbsp;<strong>US$5 trillion<\/strong>, highlighting that many otherwise viable businesses lack access to the capital required to grow sustainably (International Finance Corporation [IFC], 2023).<\/p>\n\n\n\n<p>The issue is not always the absence of customers.<\/p>\n\n\n\n<p>It is often the absence of financial flexibility.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">So when should you focus on finding customers?<\/h2>\n\n\n\n<p>None of this suggests customer acquisition is unimportant.<\/p>\n\n\n\n<p>Without customers, there is no business. However, the timing matters.<\/p>\n\n\n\n<p>If your sales pipeline is weak, marketing, business development and customer acquisition deserve immediate attention.<\/p>\n\n\n\n<p>If demand is already strong but fulfilling that demand is creating financial pressure, cash flow may be the greater priority.<\/p>\n\n\n\n<p>Business owners should regularly ask themselves a few simple questions.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Are we turning away opportunities because we cannot afford to fulfil them?<\/li>\n\n\n\n<li>Are supplier payments becoming increasingly difficult?<\/li>\n\n\n\n<li>Are we delaying investments that would improve productivity?<\/li>\n\n\n\n<li>Is growth placing more pressure on the business than stability?<\/li>\n<\/ul>\n\n\n\n<p>If the answer to these questions is yes, then the underlying issue may not be customer demand.<\/p>\n\n\n\n<p>It may be working capital.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Funding should support growth, not rescue it<\/h2>\n\n\n\n<p>Many entrepreneurs only begin exploring funding once they encounter financial stress.<\/p>\n\n\n\n<p>By this stage, funding becomes reactive.<\/p>\n\n\n\n<p>The more effective approach is to secure access to capital before it becomes urgent.<\/p>\n\n\n\n<p>Research by the World Bank consistently shows that access to finance remains one of the primary constraints limiting SME growth in emerging markets (World Bank, 2024).<\/p>\n\n\n\n<p>Businesses that can invest ahead of demand are generally better positioned to expand, innovate and remain competitive.<\/p>\n\n\n\n<p>Funding should enable businesses to purchase inventory before peak trading periods, invest in productivity improvements, hire employees ahead of expansion or manage temporary cash flow fluctuations.<\/p>\n\n\n\n<p>In other words, funding works best as a growth strategy rather than an emergency measure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Customers and cash flow are partners, not competitors<\/h2>\n\n\n\n<p>Framing the debate as \u201ccash flow versus customers\u201d can be misleading.<\/p>\n\n\n\n<p>Successful businesses need both.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Customers generate revenue.<\/li>\n\n\n\n<li>Cash flow determines how effectively that revenue can be transformed into sustainable growth.<\/li>\n<\/ul>\n\n\n\n<p>A business with strong cash flow but no customers has no future.<\/p>\n\n\n\n<p>A business with many customers but insufficient cash flow may also struggle to survive.<\/p>\n\n\n\n<p>The objective is balance.<\/p>\n\n\n\n<p>Growth without financial stability creates unnecessary risk. Financial stability without growth limits long-term potential.<\/p>\n\n\n\n<p>The strongest businesses recognise that acquiring customers and managing cash flow are complementary disciplines rather than competing priorities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Building businesses that last<\/h2>\n\n\n\n<p>Entrepreneurship often celebrates growth, but sustainable growth requires more than increasing sales. It requires financial discipline, thoughtful planning and the ability to invest confidently when opportunities arise.<\/p>\n\n\n\n<p>For South African SMEs, where economic conditions remain challenging and access to finance is often limited, understanding the relationship between customers and cash flow has never been more important.<\/p>\n\n\n\n<p>Businesses that succeed over the long term are rarely those with the most customers.<\/p>\n\n\n\n<p>They are the businesses that understand how to convert opportunity into sustainable growth.<\/p>\n\n\n\n<p>Finding customers opens the door.<\/p>\n\n\n\n<p>Managing cash flow keeps it open.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many entrepreneurs believe they need more customers. In reality, they may need better cash flow. Understanding the difference could determine whether your business grows, or simply grows more vulnerable.<\/p>\n","protected":false},"author":57,"featured_media":869225,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2087100966214516970","_sma_facebook_post_id":"191437357620492_2172923660194700","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[10459],"tags":[26122,24755,26121],"class_list":["post-869224","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news","tag-chad-tessendorf","tag-gotyme-bank","tag-gotyme-bank-2"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/869224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=869224"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/869224\/revisions"}],"predecessor-version":[{"id":869671,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/869224\/revisions\/869671"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/869225"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=869224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=869224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=869224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}