Your post-budget survival guide – from a veteran banker who's seen it all

Now the dust has settled, we've asked Enterprise Nation adviser and former banker Iain Hawthorn for his take on the impact of last week's Budget.

Seasoned business consultant Iain founded Aravis UK Ltd earlier this year, offering advice and support to start-ups and small firms in Kent and running group advisory sessions for business owners.

It's part of his long-term mission to see businesses in his region flourish through his involvement with local business groups like Growing Kent and Medway and lecturing at Canterbury Christ Church University.

Following a 40-year corporate banking career and several senior positions at HSBC, Iain has been at the economic coalface during seismic fiscal events like the credit crunch, Brexit and the COVID-19 pandemic.

Why cash will be king

Iain says:

"I've spent 40 years watching how people behave around money and learning how they respond when they feel threatened or lack confidence.

"Cash will be king over the next few months or years. The lockdown mentality – the siege mentality, for want of a better term – might see corporates and households focus on cash."

When businesses start hoarding cash, Iain says, he knows what's coming next. He's developed an instinct for when economic anxiety turns into something more serious.

And right now, in the wake of Chancellor Rachel Reeves' Budget, Iain says he's seeing the warning signs again. He's not alone.

This week, researchers at the OECD have said the £26 billion increase in taxes will constrain the UK economy for the next few years.

Cash flow equals resilience

Iain explains:

"It's a question of what you can do to be more resilient. The more resilient you are with your cash flow, your liquidity, the more likely you are to ride through shocks and uncertainty.

"The first point of resilience in any business is liquidity – cash. If you don't have huge reserves of cash, then it's time to forecast, forecast, forecast.

"As I used to tell clients, the more uncertain things are, the more you need to plan."

The breakdown in trust

What concerns Iain most isn't just the direct impact on costs, but how businesses will behave toward each other.

During lockdown, he watched as trust evaporated through supply chains almost overnight. He explains:

"I had clients who were buying products from suppliers for many years or selling products to clients for years, but suddenly the trust seemed to go.

"Everyone wanted paying quicker or to hold on to their cash for longer."

He predicts this pattern could return. If households start hoarding cash, demand will fall.

Businesses facing uncertain demand will try to accelerate payments from customers while delaying payments to suppliers. The weakest links in the chain – often the smallest businesses – could feel the squeeze first.

Iain warns:

"If you can't assess where your next threat will come from, cash will be extremely important for survival."

The innovation trade-off

While resources are stretched, the need to adapt can often act as a catalyst for innovation and pivoting.

Iain points to the remarkable innovation he witnessed during lockdown, which chimes with research Enterprise Nation did with Santander.

In that research, they identified the characteristics behind the 10% of businesses that drove growth during the pandemic.

Iain said this Budget might accelerate similar shifts toward automation and AI, replacing workers with systems that "reduces their risk and improves productivity".

Changes to business rates

The Budget includes permanently lower business rates for over 750,000 retail, hospitality and leisure properties, worth nearly £900 million a year from April 2026.

A £4.3 billion business rates support package will cap bill increases for those sectors that revaluations have hit hardest.

Iain says:

"Any form of stability they're going to welcome. But it perhaps won't go as far as offsetting some of the risks and challenges they've got anyway."

How small business can survive in these times

Here are some of Iain's top tips for survival:

• Forecast obsessively: "The more uncertain things are, the more you need to plan. Scenario after scenario after scenario – look at your business to the point where you know in what circumstances it would break."

• Speak up: "It's quite a lonely, isolated existence owning and founding a business. Talk to people – friends, family, advisers. Find people in your sector and ask what they're doing."

  Through his consultancy, Iain now runs monthly group mentoring sessions where business owners share challenges and solutions. "You'll be surprised how much people care," he says. "That's quite important, actually."

• Prepare for recovery: Iain doesn't believe the cash-hoarding phase will last forever. During lockdown, after businesses stabilised and got their "heads above water", there was a predictable next phase, he says.

  "About a year later, they all got bored and wanted to grow. At some point, confidence returns and cash gets released back into the economy. But it's just when they'll feel more confident."

• Take time to think: "Pause. Take a breath. Don't panic. Christmas is a nice time to review things. Then you're back in January, energised."

People also read

• What small business owners told us about the Budget

• The Budget 2025: 12 measures that will have an impact on your small business

• Lunch and Learn: Q&A on the 2025 Budget

See our latest media and policy impact

We give small businesses a voice – in the media and in Westminster. See our latest press releases, policy insights and how we're championing small firms. Visit the media and policy centre