Abafana Bes'thende will visit Baroka FC on Saturday in the Telkom Knockout Last-16 at Peter Mokaba Stdium (15h30), a competition they have been knocked out of in the first round in the past two years by Orlando Pirates.
Arrows' best showing in the event was when they reached the semi-finals in 2003/03 and 2011/12 where they lost to Platinum Stars and Pirates respectively.
"It's important to have a good run in the cup," Larsen, who won the tournament in 2012 with Bloemfontein Celtic, tells KickOff.com.
"But you must remember it is also important to balance things out and make sure that you don't put all your focus in the cup and find yourself in trouble, which I think is what often teams do.
"So for us it is about striking the right balance and making sure we've got a competitive team for both league and cup. That is the only way you can approach this. You can't only focus on the cups, because then you are compromising your league form.
"So, like I said, for the bigger clubs they've got more depth, it's not such an issue. For a lot of the smaller clubs it's a bit challenging."
With three games in the space of a week for Arrows after the FIFA break, their depth will be tested. After the Braoka clash they will visit Free State Stars on Wednesday and then travel to SuperSport United on the Sunday.
"It's tricky one for us, playing in the cup, playing on Wednesday, and then you play Sunday against SuperSport United. So the congestion of fixtures doesn't make it easy for us when you are a small team," Larsen added.
"You've got to box smartly for the next three games to remain competitive, so for us it's not easy. We've got to make sure that we've still got our players fresh for Wednesday, an important game against Free State. Four days later on Sunday against SuperSport we've got to refresh the team.
"With the fixtures so congested, it becomes a bit of a challenge."
In team news, impressive left-back Divine Lunga and Danny Venter are out after both picking up injuries against Black Leopards before the international recess. They join the likes of long-term casualties Zolani Nkombelo and Velemseni Ndwandwe on the sidelines.
Siyanda Zwane, who has missed the last seven matches since picking up an injury against his parent club Mamelodi Sundowns in the MTN8 quarter-finals, is back to full fitness.