Business Support

Most business owners know that progress matters, but many still hesitate when it comes to planning. It can feel like an extra task or something that only large companies need to worry about. Yet, in practice, steady planning is one of the simplest ways to create real progress in any small or medium sized business. The link between the two is stronger than many people realise.

Planning works because it forces clarity. When business owners pause to think through priorities, patterns and pressures, they begin to see what is really driving results. Cash flow issues, capacity limits and pricing decisions all come into focus. This clarity helps owners make better choices, because they can see which actions will genuinely move the business forward and which are distractions. Without planning, decisions are often reactive and progress becomes slow or inconsistent.

Regular planning also builds momentum. A short monthly review of sales, costs, workload and upcoming commitments can help owners stay ahead of issues. They spot pressure points sooner and have time to adjust. Small, steady actions taken throughout the year often make far more difference than a single big push at year end. The cumulative effect is smoother trading, fewer surprises and a clearer path towards goals.

Another benefit is accountability. When owners write down their intentions, it becomes easier to measure progress. Plans do not have to be complex. A simple list of priorities, actions and expected outcomes is enough to bring structure. Even this light level of discipline strengthens focus and encourages follow through. Over time, owners start to recognise how much difference these small habits make.

Many business owners focus on sales as the main driver of growth. Sales matter, but they are only part of the story. Real financial growth happens when a business retains profits. Keeping a portion of earnings inside the business, rather than extracting everything each year, creates stability, resilience and long term value. It is one of the most reliable ways for a business to strengthen its financial position.

Retained profit is simply the surplus left after all costs, tax and drawings or dividends have been paid. When owners choose to leave some of this in the business, the financial base becomes stronger. Cash balances increase, working capital improves and the business has more freedom to act. This is important because many opportunities appear only when a business is ready to respond. A new contract, a piece of equipment, or an unexpected staff change often needs quick decisions. Financial strength gives owners room to choose rather than react.

Another advantage is the reduction of financial strain. When profits are taken out in full, the business can become fragile. Seasonal changes, delayed payments, or rising costs can suddenly create pressure. Retaining profits reduces this risk. It smooths the ups and downs of trading and reduces reliance on overdrafts or short term borrowing. Over time, this lowers costs because the business is not constantly paying interest or reshaping its finances to manage cash shortages.

Retained profits also support growth by funding future investment. Whether it is new technology, better equipment, improved systems, or additional staff, every investment needs capital. Using retained profits means the business can invest without taking on unnecessary debt. This keeps control in the hands of the owners and protects future cash flow. In many cases, even small retained amounts, built up steadily, can support meaningful improvements.

There is also a psychological effect. When owners see their business building reserves, confidence grows. Decisions become more strategic and less driven by short term pressures. This confidence often leads to better long term planning, more thoughtful hiring and a clearer focus on profitability rather than turnover alone.

Finally, strong retained profits increase the value of the business. Buyers look for organisations with reliable earnings, low debt and healthy reserves. A pattern of retaining profits signals discipline and financial strength, which can significantly improve valuation.

Retaining profits is not about restricting personal income. It is about giving the business the capacity to grow, adapt and remain competitive. When owners take a long term view, retaining profits becomes one of the simplest and most effective tools for building financial strength.

Many small businesses rely on a mix of overdrafts, card facilities and short term loans to maintain day to day cash flow. During the past year banks and alternative lenders have become more cautious, and several indicators suggest that credit conditions will tighten further during 2026. For business owners, a little early preparation can make a noticeable difference.

Lenders are placing greater emphasis on consistent record keeping, realistic forecasts and clear evidence that a business understands its cash cycle. This means that up to date bookkeeping is no longer just a compliance task. Regular management information can demonstrate stability, provide reassurance to lenders and highlight any seasonal pressures that may need attention.

It is also sensible to review existing credit facilities. Many overdrafts and business loan agreements include renewal terms, and these can be harder to negotiate if left until the last moment. Checking the renewal dates, interest rates and any security requirements can help avoid unexpected changes that affect cash flow.

Businesses that rely heavily on card funded working capital or revolving credit should consider whether these facilities remain suitable. Even a small increase in interest rates or a reduction in limits can put pressure on margins, particularly in sectors with tight cost structures.

Planning ahead can reduce risk and improve financial resilience. Reviewing cash flow forecasts, maintaining timely financial records and having early conversations with lenders can help small businesses enter 2026 with greater confidence and fewer surprises.

A limited company is a separate legal entity. In normal circumstances, its debts belong to the company, not to the directors. This is one of the central advantages of incorporation. However, the protection is not absolute. Directors have duties in law, and if those duties are not met, there are situations where personal liability can arise. Understanding the main risk areas helps directors manage their responsibilities with confidence.

The most common route to personal liability is through personal guarantees. These are often required when arranging finance or long term commitments. They appear in bank loans, leases, asset finance, invoice discounting and sometimes supplier credit arrangements. A personal guarantee means that, if the company cannot pay, the director promises to pay instead. Many directors accept guarantees without fully recognising their implications, sometimes as part of standard paperwork. If the business later becomes insolvent, the creditor may enforce the guarantee directly against the director.

Another area where liability can arise is wrongful trading. This occurs when directors continue to trade at a point where they knew, or should have known, that the company was unlikely to avoid insolvency. Once insolvency becomes likely, directors must act to minimise losses for creditors. Continuing to take new orders, incur new debts, or draw full salaries without regard to the company’s position may be seen as failing in that duty. If wrongful trading is found, a director can be required to contribute personally towards the shortfall to creditors.

Fraudulent trading is a more serious matter. This involves intent to deceive. Examples include deliberately misleading creditors, falsifying records, or taking payment from customers when it is clear the business will not be able to supply. In these cases, personal liability is likely, and criminal sanctions may also be possible.

Misfeasance relates to breach of duty. Directors must act in the best interests of the company and use company assets responsibly. Issues arise where funds are drawn inappropriately, company assets are used personally, records are not maintained, or tax liabilities are ignored. If the company enters liquidation, transactions will be reviewed. Directors may be required to repay sums that were taken improperly.

HMRC can also pursue directors personally in some situations. If there is repeated or deliberate non-payment of PAYE, NIC or VAT, HMRC may issue a personal liability notice. This is generally used where behaviour is seen as deliberate or reckless rather than a one-off difficulty.

If a company fails and a related business continues afterwards, this can also be examined. Forming a new business after insolvency is not itself prohibited, but if it appears to be an attempt to avoid debts unfairly, directors may face investigation or disqualification.

Good practice reduces risk. Clear financial records, cash flow forecasting, early advice when trading becomes difficult, care with drawings, and caution when asked to sign guarantees all help protect directors.

Current estimates suggest that there are around 5.6 million businesses operating in the UK. This figure comes from the Department for Business and Trade and the Office for National Statistics. What stands out is that most of these businesses are very small. The vast majority are run by one person, without employees, either as sole traders or small limited companies. Only a small proportion of the total business population consists of medium or large organisations, yet those larger firms account for a significant share of total employment and economic output.

Around 4.1 million of the 5.6 million businesses are sole traders. These include contractors, tradespeople, freelance workers, independent professionals, and small retail or service businesses. A further 1.1 million are limited companies. The remainder are partnerships or other legal forms. Approximately three quarters of all UK businesses have no employees at all. They are operated directly by the owner.

The UK has a relatively low barrier to starting a business. Registering as self-employed is straightforward, and forming a limited company is inexpensive and quick. This ease of entry encourages individuals to test ideas, create income streams, or change the way they work. Digital platforms have also expanded opportunities. For example, selling through online marketplaces, providing services remotely, or trading through social media channels has become increasingly common. These models enable people to run small businesses from home, with minimal overheads.

There is also a lifestyle element. Many individuals value autonomy over working hours and location. Self-employment or small business ownership provides this flexibility. Some move into business ownership after redundancy or a change in circumstances, while others start with the intention to grow something long term.

Although many of these businesses operate on a modest scale, collectively they play a major role in the economy. They support local employment, supply chains, and community activity. They bring specialist skills to market and allow rapid adaptation when customer needs change. Small businesses tend to be agile and close to their customers.

However, small businesses also face challenges. These include managing cash flow, understanding tax obligations, accessing finance, and dealing with administrative requirements. The owner often carries full responsibility, which can create pressure. Support, planning, and advice can therefore have a very positive impact.

The main message is that small business is central to the UK economy. It is diverse, active, and resilient, and it continues to shape how people work and earn today.

If your business has managed to negotiate the pandemic thus far without shedding staff you have probably made good use of the furlough scheme.

Unfortunately, in recent months the Government’s contribution to furloughed costs has been reducing, and at the end of October the Coronavirus Job Retention Scheme (loosely referred to as the furlough scheme) is closing down.

Last week, the Chancellor outlined his follow up plan – The Job Retention Scheme (JSS) – and the response from employers has been less than enthusiastic.

The JSS requires employers to employ staff for at least 33% of their normal hours, pay one-third towards any furloughed time and cover NIC and pension costs. On this basis, employers would be paying more to keep three staff working part-time, each working one-third of their normal hours, than employing one person working full time.

Employers will therefore need to consider their options. Should they soldier on, attempting to keep the team together with Government support, or is it time to take a look at what the future trading position of the company is likely to be and plan accordingly?

Readers finding themselves unable to decide which way to jump may need to step back and take a fresh look at their options. To do this it may be necessary to create a detailed business plan or revise existing forecasts based on the evolving situation.

One thing is clear, the present COVID disruption seems unlikely to disappear any time soon. From 1 January 2020, we will need to cope with Brexit issues and the Chancellor keeps reminding us that the cost of funding coronavirus grants will need to be paid for…

We can help. Please call if you would like to discuss the best way to approach this challenging planning process.

We have all been in situations where we have received bad service. 

For example, you place an order in a busy restaurant and notice that folks who had arrived after you were receiving their order before you. Time passes. Still no sign of your dinner. Stretched to its limit, your patience expires, and you call over the waiter who marches over to the kitchen area. There is an exchange between the waiter and the chef and it is evident that your order has been overlooked. 

On his return to your table the waiter explains that they are really busy, and your order won’t be much longer. He could have said, apologies, your order has been overlooked. It will be ten minutes and we won’t be charging you for your drinks…

There is a lesson that we can learn from this sort of exchange.

The last thing you want your customers to feel is that their grievances are not being understood. In our example, the diners will carry their dissatisfaction with them – however good the meal is – and they will not be willing ambassadors for your business. A short apology and compensation for your error would clear the air and re-establish goodwill.

And so, the next time you feel you need to excuse your actions, consider an apology if you have not met the expected levels of service for your business. 

The Chancellor, Rishi Sunak, has today delivered a statement to the House of Commons outlining plans to help protect jobs across the UK whilst the country faces a resurgence of coronavirus and a winter of uncertainty. The Chancellor was facing mounting pressure to reveal future changes as many of the schemes and reliefs previously announced are coming to an end including the furlough scheme at the end of October. 

It has also been confirmed that the Budget that was expected to be delivered in the autumn will now take place next year. The measures announced today are more clearly focused on keeping the economy ticking over during the coming weeks and months.

The main focus of the Chancellor’s announcements is a new Job Support Scheme and an extension to the Self Employment Income Support Scheme as well as additional flexibilities for businesses who have borrowed money as a result of the pandemic.

Details of these announcements follow:

Job Support Scheme

• A new 6-month scheme starting from 1 November 2020. 
• This scheme has been designed to support viable jobs and employees must work at least one-third of their hours, paid as normal, in order to qualify for the scheme. The government and employer will then each cover one-third of any remaining hours the employee is not working. 
• Employees will therefore forego one-third of their pay for the hours that they have not been working. This means that employees working the minimum one-third of their hours will still receive at least 77% of their pay. 
• The level of the grant will be calculated based on an employee’s usual salary but subject to a cap. 
• The Chancellor said that the scheme will be open to all small and medium-sized businesses, but larger businesses will only qualify when their turnover has fallen as a result of the pandemic. 
• You can still use this scheme even if you have not previously participated in the Coronavirus Job Retention Scheme. 
• The previously announced Job Retention Bonus, allowing qualifying businesses to claim a £1,000 for each CJRS participating employee, will remain. Employers can claim both the Job Retention Bonus and funding through the Job Support Scheme. 

Self-Employment Income Support Scheme extension

• The Chancellor announced additional help for the self-employed based on similar terms and conditions as the new Jobs Support Scheme. 
• The extended scheme will apply for 6 months from 1 November 2020 with an initial taxable grant made available to those who continue to trade and are currently eligible for SEISS. 
• The initial lump sum will cover three months of profits from 1 November 2020 calculated as 20% of average monthly profits, up to a total of £1,875. 
• An additional second grant will be available from 1 February 2021 to 30 April 2021, but the level of this second grant amount is subject to review. 

Loan deadlines extended

• Businesses that have taken out a Bounce Back Loan will be able to benefit from a new Pay As You Grow flexible repayment system. 
• This will include an extension in the loan term from six to ten years. There will also be new options for interest-only repayments for up to six months as well as payment holidays. 
• The Coronavirus Business Interruption Loans will also have their Government guarantee extended to ten years. 
• The deadline for applying for all the Government’s coronavirus loan schemes will be standardised and pushed back until 30 November 2020. 
• A new successor loan guarantee programme is also expected to be introduced early next year. 

New VAT Payment Scheme

• Businesses had the option to defer the payment of any VAT liabilities due between 20 March 2020 and 30 June 2020. 
• The deferred payment was due to be paid in full to HMRC by 31 March 2021. 
• The Chancellor has now confirmed that businesses will instead be able to make 11 smaller interest-free payments during the 2021-22 financial year.

Self-Assessment payment deadlines

• Taxpayers that were due to make their second payment on account for the 2019-20 tax year had the option to have the payment due date deferred until 31 January 2021. 
• It will now be possible to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility for this payment and also for payments due in January 2021 extending the deadline until January 2022. 

VAT reduction for hospitality and tourism sector

• The VAT reduction that was announced as part of the Summer Economic update was scheduled to end on 12th January 2021. 
• The end date for the VAT cut has now been extended until 31 March 2021 to give the affected sectors more time to adjust to the difficult trading conditions. This means that VAT charged on food, accommodation and attractions (such as eat-in or takeaway food in restaurants, cafes and pubs, cinemas, theme parks and zoos) will see VAT reduced from 20% to 5% until the end of March 2021. 

The new incentives announced today should be welcomed as the government continues to try and cope with this unprecedented pandemic. Managing the economic ramifications are causing great difficulties for many people and businesses across the country. These steps, at least, give affected businesses and individuals a degree of certainty as to the level of government assistance available to them throughout the coming months. 

As more details emerge on the various schemes announced today we will update you further.

Mothballing as used in a business sense is usually defined as to stop using a piece of equipment or process, and then storing and preserving mothballed assets for later use.

Many business owners are now faced with marshalling their resources in this way.

There is a temptation to sell off assets that are under-utilised due to the present COVID disruption. If assets are readily converted into cash this sell-off process could make a welcome contribution to cashflow.

Mothballing your entire business is another matter…

If you could stop trading and place all of your business assets – including your work-force – into hibernation, then perhaps you could close your doors and wait-out the coronavirus epidemic.

Unfortunately, most businesses have significant costs that cannot be cancelled. These fixed costs, for example rent, rates and insurances, will need to be paid even if you are closed for business.
But, for those businesses that have limited fixed costs – say businesses run from home – mothballing may be a way to protect your business from extinction while you find other paid-for work to tide you over?

In this way you could reawaken your “sleeping beauty” business when we can once again contemplate business life without the concerns of lock-down, masks and social distancing.

It is really difficult to maintain a sense of equilibrium and optimism in these difficult times. Even if you can embrace the notion that everything changes, and they do, the present restrictions on our daily business and home lives seem all consuming and never ending.

Where is the silver lining, the light at the end of the tunnel?

An effective vaccine would help as would additional treatments for those who actually catch coronavirus. But many businesses, indeed whole sectors, are now on their knees as the effects of lockdown and layoffs start to bite.

Which is why standing back to take an objective view of your affairs is so important. Very often it is impossible to see yourself objectively, caught as we are in the concerns of manging each day. If you have a business and are unsure how to react to present challenges then the investment in an independent assessment of your business or personal finances could pay dividends.

And don’t wait until circumstances – your bank, creditors or customers – dictate how you need to react. Take back control and start planning.

Initially, you will need to assess your present situation and then steer activity based on these restrictions in order to preserve your hard-won assets.

We can help. Call now so we can start to consider your options and create a possibility for that journey to reach the light at the end of the tunnel.