What Does the Budget Mean for Small Businesses?

What does the Budget mean for small businesses? Less than the headlines suggest, and more than most owners plan for. Whatever the government announces, the owners who come through it are the ones whose numbers, structures and people were ready before the news landed. This Autumn Budget is no different: you can be a victim of the Budget, or a victor over it, and that part is down to you.

I’m writing this as an owner, not a commentator. Most owners will read the headlines and either panic or ignore them. Both cost money. This is what today actually changes for an owner like you, and what I’m doing about it in my own businesses this week.

Sounds a little cliché, I know. But think about what the alternative looks like. As soon as you start passing blame because somebody is doing something to you, you lose ownership, and once you’ve lost ownership you can’t run a business. You just feel the waves hitting you, time after time. What you need is a battleship: resilience, your numbers in place, the right structures, the right people and the right culture, so that whatever the weather, you can deal with it.

Should you wait for the Budget before making business decisions?

No. Waiting is the expensive option. When owners and big companies wait, decisions don’t get made, money stops flowing down the supply chain, and the small businesses at the bottom feel it first. Whether the Budget brings good news or bad, business still happens. If we made it through COVID, we can make decisions around a Budget.

I’ve lived this. One of my businesses works for the NHS, and we’re not the large contractor; we’re one of the subcontractors. In 2024, the uncertainty before the Budget meant the large construction contractors didn’t know what it would bring: tighter margins, more tax, more tax on their people. They had thousands of families to protect, so they protected their own boat first. That meant their suppliers, the subcontractors, waited too.

Our salespeople could do everything right and still hear “we can’t tell you when the job starts, because our customer hasn’t decided.” That’s a valid barrier. No objection-handling gets around it until a decision is made higher up. And it isn’t just construction. In IT, or any industry, the same pecking order applies: money has to come from somewhere, and when there’s uncertainty, it stops. With 99% of companies being SMEs, that hold-up lands on the businesses that employ most people. It’s what I said on BBC WM, and it’s why I want SME owners to have a voice.

What does the Budget change for small business rates relief?

For your decisions, less than the buzzwords suggest. Small business rates relief and employer national insurance will dominate the coverage, and they matter. But they shouldn’t decide whether you hire, invest or hold back. That decision is yours. Get informed by your accountant, your chamber of commerce and the right news, then plan for it.

If you choose to hold back because of what might happen, that’s on you. Accountants don’t like future talk; they want evidence, to the penny, of what has already happened. That’s their job: the rear-view mirror, keeping you compliant. Your job as the owner is to predict the future. Your accountant can help with the cash flow forecasting, but the responsibility is yours.

Plan for scenario A and scenario B

Every client I coach and mentor has planning days. Once a year we build the 12-month plan, and every quarter we build the 90-day plan. In the 12-month planning day we also look 18 months out: where do we want to be? None of us has a crystal ball, but we can set the goal, the North Star, and ask what could get in the way. A national insurance change. A change to business rates relief. Then we plan for scenario A and scenario B: this is what great looks like, this is what good looks like, and are we still okay if the worst happens? That’s what moves the needle, not the individual announcement.

Run a SWOT analysis (strengths, weaknesses, opportunities, threats) every 90 days, because it always changes. A friend of mine owns an app company. You’d think app companies would be under real pressure from AI. He’s absolutely smashing it, because he got ahead of the game and found the places people would fall down when using AI.

Whether you’re a gardener, a plumber, an electrician, a software company, a manufacturer, or in care, medical or technology, the principle is the same. Where is the time set aside to plan, to do your SWOT, to do your cash flow? Most of us, and I put my hand up here, get pulled into the tornado of the week: the loudest customer, the suppliers to pay, the next payroll. Owning lots of businesses, those were the things that kept me up at night, until the right plans and systems were in place.

How do you update your cash flow forecast after the Budget?

Run three versions this week: the good, the bad and the ugly. Put today’s changes in, look at the next 13 weeks, and ask one question of the ugly version: are we still okay if the worst happens? Then book a recurring slot in your diary to revisit it every week, so it becomes a system, not a one-off.

• Put it on a spreadsheet. An Excel sheet is fine. Think of it as mini P&Ls every week.
• Use AI to build it if you want. ChatGPT, Perplexity and Claude can all help you set it up and give you good advice and strategy.
• But AI won’t give you the time. There are 24 hours in the day. The accountability to actually do it falls on you, not on a 90-minute debate with a chatbot. None of it matters if it doesn’t go in the diary and your behaviour doesn’t change.
• Ask three questions. What if the ugly version happens? What if it’s not so bad? What if the Budget barely affects us and we can actually flourish through it?

What should owners tell their team and customers this week?

Set the tone before the headlines do. Your emotions as a leader are contagious: whatever you give out spreads across your workforce and into your culture. Be the steady, positive voice this week, because a team that’s anxious about the Budget makes fewer decisions, and so do customers.

The fish rots from the head down, so decide who you’re going to be as a leader during the Budget. That’s the main question.

There’s real science behind this. Barbara Fredrickson’s broaden-and-build theory shows that the more negative emotion there is, the narrower the “thought-action repertoire” available to people. In plain English: when people feel negative, decisions get held up. People hold back. They don’t go and do the thing in front of them that they know they’re supposed to do. When I spoke to BBC WM, I had to put that in layman’s terms. Here’s the version I couldn’t say on air: more negative emotion across a team means fewer decisions being made.

There’s a saying in coaching: when the client is up, the coach is up; when the client is down, the coach is up. That’s leadership. When your team is down, you’ve got to be up and drive it through. I’m a business owner too, going through exactly the same things, and some days it’s hard. That’s exactly when it matters.

It’s a sales lesson as well. The more you drive the negativity, the fewer decisions people make. They go away to “think about it” and wait for the right time, and you’ve lost the sale. People need to be in a positive place when a decision has to be made. And as leaders and managers, you’re in sales internally too: your team is the first audience you have to convince.

What’s the one thing to do this week?

Put today’s changes into your cash flow forecast, run the ugly version, and make the decision you’ve been putting off.

Whatever the government says about its budget, you need your own internal budget for the business. I’m not here to be anti-government. They budget for a reason, so why aren’t you? I will stick up for SME owners, and I said on BBC WM that we need more upfront, proactive information to get us through hard Budgets. But even if we hear it as early as possible, it only helps if we do something with it: plan, and change our structures.

In the next episode, I’m answering the question that follows naturally from this one: how do you know you’re hiring the right person, especially when business might not be going so well, and how do you build that hire into your cash flow?

If you want to talk through your numbers, or the decision you’ve been holding off, book in a virtual coffee with me. Or if you’re ready for someone in your corner, have a look at how I work with owners.