EOW Reflections: Uncertainty

While for everyone else in business the word of the moment seems to be ‘tariffs’, for me it’s ‘uncertainty’. There’s a massive cloud of it hanging everywhere I look.

What will tariffs mean for my business? Can we deal with the increased bills by efficiencies, or will we have to let people go? Will customers accept price rises or walk away? Things are more uncertain for businesses in some sectors than others. Where they’re reliant directly on consumers, like the hospitality and leisure sectors, firms know there’s only so many pips that can be squeaked and rising household bills have already caused a lot of squeaking. Belts are tightened and pockets are empty.

Love them or loathe them pubs are a bellwether of business health and community wellbeing. 412 pubs in England and Wales closed in 2024 pushing the total number below 39,000 for the first time. Two days ago, CAMRA reported that in the first three months of 2025, 303 pubs across England, Scotland and Wales closed with a further 46 converted to other uses. Rising costs, cautious consumer spending, and economic uncertainty are cited as contributing factors. Trade bodies warn April NI rises and a reduction in business rates relief will make matters worse.

Uncertainty everywhere you look. And what do businesses do when they’re uncertain? They stop investing, creating jobs, or innovating. They don’t spend money on upskilling, retaining or new equipment. They firefight to survive rather than innovating to thrive. If our smallest of businesses, the 96% of UK businesses that are micro with 0-9 employees can’t invest and grow the rest of the small, medium and large businesses struggle too. The micros are the innovators, the creatives, the idea generating, agile sole traders and freelancers that fill the gaps in bigger business workforces or the tiny suppliers that do the stuff the bigger customers can’t do efficiently themselves. When they’re certain of the future and set their sights on increased productivity and possible growth they carry the economy before them. In periods of uncertainty like now they just frantically peddle to stay afloat.

From our point of view the biggest indicator of uncertainty is in increased payment terms in contracts. We’re seeing firms holding onto cash for longer because they’re uncertain of when they will need it. Terms in contracts are being extended: 30 to 60 days, 60 to 90 days, even 120 days to 180 days. Firms are concerned for their viability in the longer term if tariffs bite and the customers are unwilling to pay higher prices forced due to rising costs. But they’re putting their own businesses at risk by putting their suppliers at risk. At the other end of the scale the smaller supplier waiting to be paid, wondering whether they can make their own ever diminishing reserves stretch over the longer payment period and whether they’ll be able to borrow should they hit the wall, faces increasing uncertainty. That leads to thinking about delaying investment and recruitment plans, revisiting workforce structures and looking for efficiencies which in many firms can only be achieved by cutting the payroll. In worst case scenarios it means not being able to pay your own bills including your suppliers. It doesn’t take a lot of uncertainty to bring the whole economy to a grinding halt.

Businesses of every size need certainty in order to have confidence. Confidence is low at the minute by every indicator, index and measure I’ve seen. We need to get it back, as a matter of urgency. When the confidence starts to rebuild, we’ll see the green shoots of increasing productivity, burgeoning growth and fresh creativity and enthusiasm. With the current geopolitical uncertainty + tariffs + bigger bills my uncertainty is how to make that happen and how long it will take. Answers on a postcard please.