Is Economic Uncertainty Holding Your Business Back?

Published on 6 February 2025

Now I’m no expert in business, nor did I study economics at university, but my team and I speak to business owners every day, in different sectors, of different sizes, so I feel I can give my own opinion at least. Lately, business confidence in the UK has taken a real knock. I’ll be honest, my confidence has been knocked too. We set up our business just before COVID, then Russia decided to invade Ukraine, then gas/fuel prices went through the roof, then inflation surpassed 10%, interest rates went up, corporation tax increased and now – after all that – Labour have come in and started increasing employers’ taxes. All that has happened in five years! It does feel like we haven’t had a break and it’s just one thing after another, one huge kick in the teeth! Maybe I’m just naïve and this is normal. As I mentioned above, I’ve only been a business owner since 2019. Is it normal for this much to go wrong in such a short amount of time?

With rising interest rates, inflation pressures, and ongoing uncertainty in the economy, many business owners are questioning whether now is the right time to invest in equipment or grow their business.

Yeah, uncertainty can be nerve-wracking, but I do think in these situations if you try to block out all the noise, don’t read the negative media, and concentrate on what you do best (growing your business), you’ll probably find that opportunities will arise because others are avoiding them through fear or lack of confidence.

When COVID hit, Crown was nine months old. At the time when we were told to lock down, the main thought that kept running through my head was: ‘Why did I leave the security of a job to set up a business?’ Yep, a pretty negative way of thinking! However, thanks to my two business partners keeping me in check, we remained positive and tried to put a positive spin on what was a pretty awful situation. We thought the high street banks will be slow to react, slow to help out, and they will probably have no appetite to lend. We were in a fortunate position back then; we joined a larger network when we set Crown up, which meant we had, and still have, access to a huge panel of lenders. We were able to offer the CBILS and RLS loans to UK businesses, and both of these products were great. Because the high street banks were too slow to react and had little to no appetite to lend, we managed to work with hundreds of new businesses that were let down by their bank. Lots of these businesses were probably ‘too big’ to use us, however, we worked hard to find these businesses that were underserved by their banks and we gave them the funding they needed to trade through the COVID mess. Lots of these businesses still work with us to this day because we helped them when they needed it the most. Now I know we were fortunate enough to be able to offer these products in the first place, however, this is a great example of turning a pretty bad situation into something positive by blocking out the noise and trying to find the good in a bad situation.

However, it’s not just as easy as ‘remain positive and you’ll be alright,’ trust me, I get that! The main issues that business owners are facing today are:

• High borrowing costs – the base rate is still pretty high, this is affecting the costs of borrowing in your business. Also, the main issue with this (this is my biggest problem), our mortgages are much higher than normal, and for that reason, we’re having to pay ourselves more just to cover the bills, meaning more money is coming out of the business for no real gain!
• Cash flow pressures – inflation has increased operating costs, squeezing margins and making large upfront purchases feel risky. Not to mention, nobody seems to pay each other on time.
• Market uncertainty – the majority of industries are experiencing fluctuating demand, which makes it difficult to forecast future returns on investment.

With all this in mind, businesses still need to push forward, stay competitive and find new ways to grow. After all, what are we going to do? Up and leave to Dubai? While I wish that was an option – no tax, nice weather, good schools, cheap fuel – like most, my family, friends, my business, and my team are here in the UK, so that’s just not a possibility. So rather than just sitting here and accepting the fact the economy is weak, we may as well try and do something about it, outwork it, come up with new ideas, take risks—after all, isn’t that what owning a business is all about?

So, what can we do to keep pushing forward?:

• Look for efficiency gains – invest in equipment that improves productivity or reduces long-term costs. Use technology/AI to automate some of your processes.
• Look for gaps in the market and create your own USP – can you price work with a better margin if you have more advanced equipment? If you purchase that equipment, does that give you an advantage over your competition? Find something that sets you apart from your competition and use that as a way to price work at a higher margin. Just being the ‘cheapest’ all the time doesn’t work in the long run.
• Take advantage of tax/government incentives – some government-backed schemes or tax reliefs still exist to support business investment. Staying informed could make a significant difference to affordability.
• Manage your cash flow properly – definitely easier said than done here… But create a cash flow forecast, plan ahead, and make sure you have a buffer in case customers don’t pay on time. Loans are still pretty easy to get approved. Consider using a loan to bolster your cash flow. Yes, there is interest, but if you’ve got the cash in the bank, would that give you the confidence to tender for that new project, invest in new kit, or employ that salesperson to increase revenue?

I know you might think this is biased, and yes, of course it is! But if you use finance properly, it can be a great way to grow your business in a way where you don’t smash your cash flow to pieces. Instead of large capital outlays, asset finance options such as leasing or hire purchase help you spread the cost of kit while preserving cash flow. Just make sure you work with a good, reputable broker with lots of reviews and case studies, whether that is Crown or someone else. There are lots of very good, knowledgeable, and trustworthy brokers out there if you do a bit of research.

Even in a weak economy, continuing to grow a business is crucial for building resilience, gaining a competitive edge, and ensuring long-term success. By adapting and innovating during tough times, businesses can strengthen their position, attract loyal customers, and position themselves for growth once the economy recovers. Staying focused on growth also opens opportunities to diversify revenue streams, attract top talent, and secure investment, all of which contribute to the business’s future stability and profitability.

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