Business Support

Business solvency refers to a company’s ability to meet its financial obligations as they fall due and to maintain a healthy balance between its assets and liabilities. It is one of the key indicators of financial stability and is essential for the long term survival of any business.

A solvent business has sufficient resources to pay suppliers, employees, lenders and the tax authorities on time. Maintaining this position helps to build trust with stakeholders. Suppliers may be more willing to offer favourable credit terms, lenders may be more comfortable providing finance, and customers are more likely to have confidence in a business that appears financially stable.

Solvency is also important from a legal and governance perspective. Company directors have a duty to ensure that their business does not continue trading if it is unable to meet its obligations. If a company trades while insolvent, directors could face serious consequences, including potential personal liability for certain debts.

Regular financial monitoring plays an important role in protecting solvency. Reviewing management accounts, balance sheets and cash flow forecasts allows business owners to identify potential problems early. This may provide time to reduce costs, improve collections from customers, refinance borrowings or introduce additional capital.

Maintaining adequate reserves and controlling debt levels are also key elements of a strong solvency position. Businesses that rely too heavily on borrowing can become vulnerable if trading conditions deteriorate or interest rates rise.

For these reasons, solvency should be seen as a core measure of business health. Regular financial review and forward planning can help ensure that a business remains stable, resilient and able to meet its commitments.

Reducing energy intensity is one of the most practical ways for small businesses to protect themselves from rising energy costs, particularly if global energy markets remain unstable because of the ongoing conflict involving Iran. Oil prices have already surged sharply due to disruption in key supply routes such as the Strait of Hormuz, raising concerns about higher inflation and energy bills worldwide.

For many businesses, energy is a significant operating cost. Surveys suggest that two thirds of UK businesses spend between 5 per cent and 20 per cent of their total outgoings on energy, meaning even modest price increases can have a noticeable impact on profitability

One of the most effective responses is to reduce energy intensity, which means using less energy to produce the same level of output. The first step is often to review how energy is actually used within the business. Installing smart meters or carrying out a simple energy audit can reveal waste that may otherwise go unnoticed. For example, heating and lighting frequently remain on outside working hours, particularly in offices and retail premises.

Lighting is usually one of the quickest improvements. Switching to LED lighting and installing motion sensors or automated timers can cut electricity consumption significantly. Many small firms have already taken this step, with research showing that around 69 per cent of SMEs investing in energy efficiency have upgraded their lighting systems.

Heating and insulation are another important area. Poorly insulated buildings lose heat quickly, meaning boilers or electric heating systems must run for longer periods. Improving insulation, installing programmable thermostats, and maintaining heating equipment can all reduce energy demand. Guidance from energy advisers suggests that better heating controls and reduced heat loss are among the most effective workplace efficiency measures.

Businesses can also review equipment and production processes. Older machinery, refrigeration units, and computers often consume significantly more electricity than newer models. Regular maintenance and gradual replacement of inefficient equipment can therefore produce long term savings.

Finally, some businesses are investing in on site renewable energy such as solar panels. While this requires an initial investment, generating electricity directly can reduce reliance on volatile energy markets and provide greater cost stability.

In uncertain times, improving energy efficiency is often the most reliable hedge against rising energy prices. Businesses that reduce their energy intensity not only cut costs today but also strengthen their resilience against future shocks in global energy markets.

The speed with which a business can achieve a return on investment is often just as important as the size of the return itself. When investments begin generating benefits quickly, the financial impact can be felt much sooner, improving cash flow and strengthening overall business resilience.

In periods of economic uncertainty, including times when input costs such as energy, materials, or finance are rising, faster payback periods become particularly valuable. Projects that recover their costs quickly reduce risk because the business is exposed to changing economic conditions for a shorter period of time. Once the initial investment has been recovered, any continuing savings or additional income effectively becomes a financial gain.

For example, many energy efficiency improvements such as LED lighting, improved heating controls, or better insulation can often pay for themselves within a relatively short period. After the initial costs have been recovered, the continuing reduction in energy bills becomes a direct improvement to profitability.

A faster return on investment can also free up capital for further improvements. Once the first project has repaid its cost, the savings generated can be reinvested into other efficiency measures or growth opportunities.

For business owners, this highlights the importance of prioritising investments that deliver early financial benefits. Quick wins not only improve profitability but also create momentum for further improvements across the business.

As artificial intelligence becomes embedded in everyday business activity, many clients are asking how it might affect their industry and long term prospects. While some sectors face significant disruption, healthcare and social care stand out as the most resilient major industry as AI develops.

The core reason is demand. Healthcare is driven by long term demographic trends rather than technology cycles. An ageing population, rising life expectancy and an increase in long term and chronic conditions mean that demand for medical and care services continues to grow steadily. This underlying pressure alone limits the scope for workforce reduction, even where productivity improves.

AI is already playing an important role in healthcare. Diagnostic support tools, medical imaging analysis, appointment scheduling, triage systems and clinical note drafting are becoming increasingly common. However, these technologies tend to support professionals rather than replace them. Clinical decisions still require judgement, context and accountability, all of which remain firmly human responsibilities.

Much of the value delivered in healthcare and social care is also relational. Patients need explanations they can understand, reassurance at stressful moments and ongoing support rather than one off interventions. In social care in particular, the service is inseparable from human presence. While technology can assist with monitoring and coordination, it cannot replicate empathy, trust or personal interaction.

In short, while AI will reshape how healthcare operates, it is far more likely to change how people work than to remove the need for them.

Renewed conflict in the Middle East is already having knock on effects for the global economy, and UK business owners are likely to feel the impact through higher costs and increased uncertainty rather than direct disruption.

The most immediate pressure point is energy. The Middle East remains a critical region for global oil and gas supply, and any escalation tends to push wholesale prices higher. Even short term market reactions usually feed through to UK petrol and diesel prices, and to business energy bills over time. For firms with transport heavy operations or energy intensive processes, this can quickly squeeze margins.

Higher energy costs also ripple through supply chains. Increased fuel prices raise the cost of moving goods, both domestically and internationally. Where shipping routes are disrupted or rerouted, freight costs rise further and delivery times lengthen. For import reliant businesses, particularly retailers and manufacturers, this can affect both pricing and stock availability.

These pressures feed into the wider cost of living picture. As households face higher fuel and utility costs, discretionary spending often weakens. Hospitality, leisure and non-essential retail tend to feel this first, as consumers become more cautious. Even businesses that are not directly exposed to energy markets can be affected through softer demand.

There is also a broader inflationary risk. If higher energy and transport costs persist, overall inflation may remain elevated for longer. This increases the chance that interest rates stay higher than previously expected, affecting borrowing costs, investment decisions and property markets.

For UK business owners, the key response is planning rather than panic. Reviewing energy usage, stress testing cash flow, and building flexibility into pricing and supplier arrangements can help manage a period of heightened volatility.

The government has announced a new package of measures designed to improve access to finance for creative businesses across the UK. The initiative aims to support firms operating in areas such as film, television, music, design, publishing, gaming and digital media, many of which face unique challenges when seeking external funding. The package forms part of the wider Creative Industries Sector Plan and is intended to help businesses grow, innovate and attract long term investment.

A central element of the announcement is an expanded role for the British Business Bank in supporting creative enterprises. This includes targeted investment activity under its Industrial Strategy commitments, with funding directed towards specialist investors that understand the commercial potential of creative ventures. The intention is to increase the availability of early stage and growth capital for businesses whose value is often tied to intellectual property rather than physical assets.

Alongside direct investment, the government is exploring ways to make better use of financial guarantees to encourage lenders to support creative businesses. This includes looking at how intellectual property can be more effectively recognised within lending decisions, which could help unlock finance for businesses that have strong ideas and brands but limited tangible security.

To make the funding landscape easier to navigate, a new single access point for creative businesses is being developed. This will provide clearer guidance on finance options, support services and growth opportunities, backed by practical resources and real world case studies.

The creative industries already make a substantial contribution to the UK economy and continue to grow faster than many other sectors. By improving access to finance and reducing barriers to investment, this package is intended to help creative businesses realise their full potential and strengthen the UK’s position as a global creative hub.

For many business owners, the focus is firmly on growth, profitability and day to day operations. Exit planning is often treated as something to think about later, perhaps a few years before retirement or when a buyer appears. In reality, leaving exit planning until the end can significantly reduce the value of a business and limit the choices available to the owner.

Business exit planning is not just about selling. It is about ensuring that the business can continue without relying entirely on the owner, whether the eventual exit is a sale, a management buyout, a family succession, or an orderly wind down. A business that depends heavily on one individual is harder to transfer, riskier to run, and usually worth less in the eyes of buyers, lenders and investors.

Early exit planning helps owners build value deliberately. This includes strengthening management teams, improving systems and processes, diversifying customer bases, and ensuring financial information is clear and reliable. These steps do not just support an eventual exit; they often lead to better performance and lower stress while the owner is still actively involved.

Tax planning is another critical element. Decisions made years in advance can have a major impact on the net proceeds of an exit. Reliefs, ownership structures, remuneration strategies and timing all need careful thought. Leaving this too late can mean avoidable tax costs and missed opportunities.

There is also a personal dimension. An exit is one of the most significant financial and emotional events in an owner’s life. Planning early allows time to define personal goals, whether that is retirement income, a new venture, or a gradual step back rather than a sudden stop.

In short, exit planning is not about leaving tomorrow. It is about running today’s business in a way that protects value, preserves choice, and gives the owner control over how and when they eventually move on.

The latest figures from the Office for National Statistics show that in 2025 the number of UK business births exceeded business deaths for a second successive year, pointing to a net increase in the total number of active enterprises. According to data from the Inter-Departmental Business Register, there were 313,715 new businesses created in 2025 and 285,245 that ceased trading, resulting in a net growth of 28,470 businesses on the register. This pattern suggests that entrepreneurial activity remains resilient despite broader economic headwinds and contributes to modest expansion in the overall business population.

Quarterly official statistics for late 2025 also reinforce this trend. Figures for the fourth quarter (October to December) show that new business formations increased by 10% compared with the same period in 2024, while business closures were 3.6% lower than in the prior year period. Growth in start-ups was recorded across most industrial groups, with particularly strong increases in transport, storage, information and communication sectors.

These statistics underline a shift from earlier quarters, where the balance of births and deaths fluctuated more and in some sectors raised concerns about churn and employment impact. However, the annual outcome for 2025 reinforces a net positive dynamic in UK enterprise counts. While the headline birth-death balance is encouraging, analysts note it remains important to monitor the quality of job creation and the survival prospects of new businesses as they scale. The figures are part of official statistics in development and will be refined as further data become available.

Many business owners are entering the new year with a sense of caution. Confidence across the UK business community has softened, driven by continued cost pressures, uncertainty over tax policy and higher financing costs. In this environment, reviewing budgets and forecasts is not just a routine exercise, it is an essential management discipline.

For many businesses, budgets prepared twelve months ago may no longer reflect reality. Energy costs, staffing expenses, supplier prices and interest charges have all shifted, sometimes significantly. A refreshed budget allows owners to reassess their cost base, identify areas of pressure early and make informed decisions rather than reacting late to problems as they arise.

Forecasting is equally important. Cash flow forecasts, in particular, help businesses understand whether they have sufficient headroom to absorb slower sales, delayed customer payments or unexpected expenditure. Regular forecasting can highlight pinch points well in advance, giving time to adjust payment terms, renegotiate facilities or defer non-essential spending.

This is also a good opportunity to test assumptions. What happens if sales fall by 10%, or if wages rise faster than expected. Scenario planning helps owners see the impact of different outcomes and decide which risks need active management. It also provides a more robust basis for discussions with lenders, investors or advisers.

Reviewing budgets is not about pessimism. It is about clarity. Businesses that understand their numbers are better placed to protect margins, prioritise profitable activities and make confident decisions even in uncertain conditions.

We can support this process by helping to update forecasts, interpret the figures and translate them into practical actions. Regular reviews throughout the year can turn budgeting from a static document into a valuable decision-making tool.

Hospitality businesses continue to operate in a challenging environment. Rising wage costs, energy prices and supply chain pressures have all placed strain on margins. Against this backdrop, recent business rates support measures offer welcome relief and can have a meaningful impact on cash flow and operating costs.

For many pubs, restaurants and cafés, business rates represent a significant fixed cost. Support measures introduced following the latest revaluation aim to reduce the immediate burden, particularly for smaller and mid-sized premises. In practical terms, this can mean lower monthly outgoings and improved short-term cash flow.

However, the benefit is not automatic. Reliefs and discounts often depend on eligibility criteria, correct property classifications and timely applications. Businesses that assume the reduction will simply appear in their bill may miss out or receive less relief than expected. Reviewing rates bills carefully remains essential.

Improved cash flow from rates support can provide breathing space, but it should also prompt forward planning. Some businesses may choose to reinvest the saving into staff retention, marketing or modest refurbishments. Others may prioritise rebuilding reserves that were eroded during recent difficult trading periods.

It is also important to remember that rates support may be time-limited. Temporary reliefs can reduce costs in the short term but should not be relied upon indefinitely. Incorporating revised rates into cash flow forecasts helps owners understand the longer-term position once reliefs taper or end.

We can help by reviewing eligibility, checking bills for accuracy and modelling the impact of rates changes on cash flow. For hospitality businesses operating on tight margins, even modest savings can make a noticeable difference when properly planned for and managed.