Over the past year, small businesses have been squeezed from all sides, from NI and wage hikes to spiraling supplier and energy costs. In our recent survey, over half said they’re at breaking point, with one more cost increase enough to shut them down.
And that was before this week’s storm clouds, with the NIESR warning Rachel Reeves she will have to raise taxes in the Autumn Statement to plug a £40bn+ spending gap and the Low Pay Commission signalling another minimum wage rise next year.
Add those pressures together and the message to small firms is stark: no cavalry is coming. The Government can’t and won’t save you, so you need to take control of your own destiny.
I don’t say that lightly. Before I led a technology business, I co-owned a jazz club in Reading. So I intimately understand the pressure. Weekends were alive but Sundays and Mondays I was stuck in the books to make sure I made Tuesday’s payroll.
Today, at Dext, I speak to several small business owners every day. The tone is the same across sectors: people are exhausted, suspicious of big promises and running out of slack.
While ministers talk of “unleashing Britain’s entrepreneurial spirit,” small firms face a harsher reality. Policy U-turns, tax uncertainty and economic volatility have turned planning into guesswork. Most owners we surveyed said strategy is “virtually impossible” - and who can blame them?
Take the Spirit of Yorkshire distillery, which pinned its hopes on the much-hyped India trade deal. Behind the headlines, benefits are at least 18 months away - too late for businesses planning growth now. It’s a familiar pattern: big promises, slow delivery, little practical support.
The issue isn’t intent, it’s execution. The government seems out of touch with the daily realities of running a small business and lacks the tools or strategy to meaningfully help.
So, where does that leave small businesses?
Struggling - but not powerless. The smartest entrepreneurs are pivoting fast by making the tough calls early, planning for chaos not clarity, embracing AI and automation and using data to defend margins.
Take Humdingers, a beloved North London hospitality social enterprise, which is closing venues to protect the core catering business. The emotional toll is high, but this kind of tough decisiveness is what many businesses need right now.
With tax and wage hikes looming, savvy operators will assume rising costs and weaker demand. They’ll run scenarios based on pricing moves, spend cuts, hiring pauses and supplier renegotiations. But only a third of firms we surveyed plan this way. The “unthinkable” becomes survivable when it’s rehearsed.
Others are automating the routine by embracing the latest AI tools. This isn’t about shiny tech, it’s about buying back leadership time. Free hours are the difference between reacting to trouble and spotting it early.
While more are doubling down on data to protect margins. Brighton-based Bison Beer has grown to six sites despite hospitality headwinds by embedding data into everything, from menu design and staffing to micro-location pricing based on what sells, when, and at what cost.
None of this means the Government has no role. If ministers are serious about growth, they should match their late-payment reforms with practical productivity policy.
A well-targeted incentive for productivity tech - like VAT relief or tax credits - would be low-cost, high-impact policy. We incentivise electric vehicles because they serve a long-term public good. Why not do the same for the digital infrastructure that underpins most UK firms?
Even a modest monthly credit per business would signal a real commitment to productivity over press releases, nudging firms toward smarter operations and linking relief to outcomes like hours saved, not vague “digital transformation” slogans.
But here’s the uncomfortable truth: even the best-designed relief won’t land overnight, and the Autumn Statement may bring higher taxes and higher wage floors before any new support is live. That’s why self-reliance is a survival strategy.
So for the next 12 months, the most important margins are yours: your hours, your cash conversion, your unit economics. Protect them ruthlessly.
The Government isn’t coming. It’s time to take control, face the fear and plan for a future that - for now - you’ll have to build on your own.
Sabby Gill is CEO of Dext and former chair of Digital Leaders
