How Directors Can Protect Their Business During Financial Uncertainty
By Keywood Group
Running a business in 2025 comes with unprecedented challenges. Rising interest rates, energy costs, and supply chain disruptions are putting pressure on cashflow and profitability. For directors, the key question is: how do I protect my business before financial difficulties become critical?
This article explores practical steps directors can take to safeguard their company, maintain compliance, and avoid the pitfalls that can lead to insolvency.
- Monitor Cashflow Daily
Cashflow is the lifeblood of any business. Directors should:
- Track incoming and outgoing funds carefully
- Identify periods of shortfall early
- Use scenario planning to anticipate future pressures
Even minor shortfalls left unchecked can quickly escalate into a major crisis.
- Communicate with Creditors Early
If your company is struggling to meet obligations:
- Notify key creditors before missed payments occur
- Negotiate payment plans or deferred terms
- Keep records of all communications
Early engagement often preserves relationships and prevents legal action.
- Seek Professional Advice
Directors who wait too long often limit their options. Professional advice can help with:
- Restructuring plans and CVAs
- Negotiations with banks, suppliers, or HMRC
- Compliance with director duties and insolvency law
Keywood Group can provide confidential guidance before problems escalate.
- Evaluate Restructuring Options
Not all financial difficulties require liquidation. Directors may consider:
- Company Voluntary Arrangements (CVAs)
- Administration or pre-pack sales
- Refinancing or equity injection
Choosing the right option early maximises the chance of a successful turnaround.
- Maintain Accurate Records
Poor record-keeping can be a director’s worst enemy. Ensure:
- Financial statements are up-to-date
- Creditors and liabilities are clearly documented
- Any unusual transactions are fully explained
Accurate records protect directors if questions arise from regulators or creditors.
- Understand Your Legal Duties
Directors must always act in the company’s best interests, even during financial distress. Key points:
- Avoid wrongful trading (continuing to trade when insolvency is inevitable)
- Keep personal and company finances separate
- Document decisions and advice received
Failure to comply can result in personal liability.
Final Thoughts
Financial uncertainty doesn’t have to mean the end of your business. By monitoring cashflow, engaging with creditors, seeking advice, and understanding legal obligations, directors can take proactive steps to protect their company.
At Keywood Group, we help directors navigate financial challenges with practical solutions tailored to their situation. If your business is facing pressure, contact us today for a confidential discussion about your options.
