It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Jonathan Cooper, Founder & Director of The Director’s Helpline and The Director’s Choice.
2025 is going to be a challenging year for UK businesses – especially in relation to finances.
With the Government increasing employer National Insurance contributions from 13.8% to 15%, businesses will be facing higher employment-related expenses, which could impact profitability and business viability, as a result.
There’s also the ongoing issue of bad debt. UK SMEs saw this surge last year – seeing many SMEs having to write off almost £40,000 each in unpaid invoices over a 12-month period.
I believe that with increased financial pressure on UK businesses, this means we’ll likely see insolvency rates climb – perhaps not immediately, but in six months, there could be massive changes.
If we look at the Government’s insolvency statistics for October 2024, there were 1,747 insolvencies in total.
However, while this was a 10% decrease on the previous month, the number of company insolvencies remained much higher than those during the pandemic.
While all sectors will feel the financial impact of the Budget, there are some – including hospitality and construction – where already tight budgets will be further squeezed. This is due to the complex geopolitical backdrop, and subsequent impact on consumer confidence.
The recent change in government in both the US and UK, the UK economy’s slow growth, disrupted supply chains, and restricted cash flows, are hurdles that will continue to shape the future of business this year.
The pandemic taught businesses that forward planning and resilience strategies are key in helping maintain business continuity when the going gets tough. Therefore, it’s likely that the uncertain economic backdrop will see directors and business owners seeking more advice on the running of their business – being more proactive rather than reactive.
As such, they will likely be taking greater measures to prepare – surrounding themselves with the right support and advice networks to help them plan for different eventualities.
