Category: Business Support

Valuing and pricing goods and services

For any business, knowing how to value and price what it sells is fundamental to success. Yet many small firms still rely on guesswork or simply copy competitors’ prices without understanding whether their own costs, quality or value proposition justify those figures. Accountants can play an important role in helping clients to take a structured approach to pricing and valuation, ensuring that products and services deliver both profit and sustainability.

Understand the true cost base
The starting point for any pricing decision is to establish the real cost of production or service delivery. This includes not only direct costs such as materials, wages and subcontractors, but also a fair allocation of overheads such as rent, utilities, marketing and administration. Once a business has a full understanding of its cost base, it can identify the minimum viable price required to cover costs and earn a profit margin. Accountants can assist by reviewing costing methods and ensuring that indirect costs are not overlooked.

Add value, do not just add margin
Too many businesses apply a simple markup to costs and call it pricing. A more strategic approach looks at the perceived value from the customer’s perspective. What problems does the product or service solve, how is it different and what benefits does it offer compared with competitors? Value-based pricing allows firms to charge more when the customer sees a clear benefit or saving. For example, if a service saves a client several hours each week, the price can reflect part of that time saving as additional value.

Use segmentation and flexibility
Not all customers are the same and pricing does not have to be either. Offering packages or tiers can help serve different market segments without undercutting core pricing. For example, a “standard,” “premium,” and “enterprise” level can target different budgets and expectations. Seasonal discounts, early payment incentives, or loyalty pricing can also be effective if managed carefully. The key is consistency and transparency.

Monitor performance and adjust regularly
Pricing is not a one-off exercise. Markets, costs and demand all change. Businesses should regularly review their margins, conversion rates and customer feedback to assess whether their pricing remains competitive and profitable. Accountants can add value by providing performance reports and benchmarking against industry standards.

If you would like help reviewing your pricing structure or working out how to value what you sell, please get in touch. We can help you analyse your costs, benchmark performance and design a pricing model that supports long-term profitability.

UK productivity remains disappointingly weak

The UK continues to struggle with low productivity growth, a long-running challenge that shows little sign of improvement. In the three months to June 2025, output per hour worked was around 1.5% above its pre-pandemic level, but it actually fell by almost 1% compared with the same period a year earlier. The previous quarter had seen only a marginal rise and overall, the trend is one of stagnation rather than sustained growth.

Although the figures appear slightly better than before the pandemic, they underline a deeper problem. Productivity growth has been flat for much of the past fifteen years, averaging only around 0.5% per year since the financial crisis, compared with about 2% annually in the decades before 2008. This persistent weakness limits the economy’s ability to generate higher living standards, boost wages and support stronger public finances.

What lies behind the figures

Several factors contribute to the poor results. A shift in activity towards lower-productivity industries has diluted national performance, as sectors such as retail, hospitality and parts of the public sector expanded while more productive sectors grew more slowly. The public sector itself has seen a notable rise in hours worked, particularly in health and social care, without a matching increase in measured output.

Regional disparities also continue to weigh on national averages. London and the South East maintain far higher productivity levels than many other parts of the country, particularly regions with weaker transport links and lower investment. Capital investment remains subdued overall, and many businesses have been slow to adopt new technology or digital systems that could raise efficiency.

The bigger picture

For all the political focus on growth, the UK remains trapped in what economists often call a productivity puzzle. The country is producing more than before the pandemic, but only slightly and progress is fragile. Without stronger investment, skills development and incentives to innovate, productivity gains are likely to remain modest, constraining both wage growth and the government’s ability to fund improvements in public services.

Why solvency is the true test of business strength

Every successful business, no matter how innovative or fast-growing, ultimately depends on one simple measure: solvency. A solvent business is one that owns more than it owes, with sufficient assets to cover its debts and the means to continue trading. It is not just an accounting concept, but a signal of underlying financial health and resilience.

Solvency shows that a business can meet its obligations, even during difficult trading periods. When liabilities are kept under control and supported by tangible or liquid assets, a company is less vulnerable to cash flow shocks, rising interest rates or late payments from customers. It provides confidence to suppliers, lenders and investors that the firm is being managed prudently and that short-term fluctuations will not lead to crisis.

Maintaining solvency also provides flexibility. A business that operates with positive net assets can reinvest in growth, negotiate better borrowing terms and respond quickly to new opportunities. In contrast, firms that operate on the edge of insolvency often spend much of their time managing creditors, juggling payments or seeking emergency funding, which can distract from long-term strategy.

There are wider benefits too. Solvent companies tend to attract better staff and more loyal customers, as both groups are reassured by signs of stability. Regulators, insurers and trade bodies all view solvency as a key indicator of sound governance and reliability. For owner-managed firms, it can also make a significant difference when planning for succession, exit or sale, as buyers and investors typically value strong balance sheets and minimal debt exposure.

Regular financial reviews, realistic cash flow forecasts and disciplined control of borrowing are all essential to sustaining solvency. While profit is the measure most often discussed, solvency is the foundation that supports it. A business may trade at a loss for a short period and recover, but once it becomes insolvent, the options narrow rapidly. In uncertain economic conditions, staying solvent remains the clearest mark of real business strength.

Business meetings – Face to face or online?

The way we meet has changed dramatically in recent years. Technology now makes it possible to discuss projects, close deals and hold team meetings without ever leaving our desks. Yet for many, there is still something powerful about sitting across the table from another person. Both formats have their place, and the right choice often depends on purpose, people and context.

Online meetings are efficient. They remove the need for travel, save time and allow busy people to meet at short notice. For businesses with remote staff or clients across the country, video calls make communication easy and inexpensive. Online platforms also allow for screen sharing, document collaboration, and recording, all of which can make discussions more productive.

However, virtual meetings can have drawbacks. Technical glitches, weak connections and background distractions can interrupt the flow. It can also be harder to read body language or sense engagement, especially in larger groups. Without informal conversation before or after a meeting, relationships can feel more functional than personal.

Meeting in person allows for a deeper level of connection. Subtle cues, tone, and eye contact help build trust and understanding, especially when sensitive or complex matters are involved. Negotiations, strategic planning and first introductions often benefit from a personal touch. The act of meeting physically can also signal commitment and importance.

The disadvantages are mainly practical. Face-to-face meetings take more time and often involve travel costs. Coordinating diaries can be difficult and the environmental impact of regular travel is increasingly questioned.

For most businesses, a mix works best. Routine updates and quick check-ins are well suited to online meetings, while major decisions, negotiations, or relationship-building sessions still benefit from being held in person. The key is to choose the setting that best supports the outcome you want to achieve.

Winning new contracts without offering punitive credit terms

In today’s competitive market, many businesses feel pressured to extend generous payment terms to win new contracts. However, offering long or risky credit arrangements can strain cash flow and expose you to unnecessary financial risk. The good news is that there are other, more sustainable ways to attract and retain valuable clients.

One effective strategy is to focus on value rather than price. You should emphasise the quality, reliability and consistency of your service. Clients are often willing to pay on standard terms if they see that your business delivers dependable results and reduces their own risks. Highlight testimonials, case studies, and evidence of past performance to reinforce this message.

Second, improve transparency in your proposals. Set out clear timelines, deliverables and support arrangements. Buyers are more likely to accept normal payment terms when they feel confident about what they are getting and when they will get it.

Third, consider flexible but controlled options such as staged payments or deposits. These can balance client confidence with your need for steady cash flow. For example, 30% on order, 40% on delivery, and 30% on completion is often easier for clients to manage than a lump sum.

Finally, build strong relationships. Personal trust remains one of the most powerful negotiating tools. When clients view you as a partner rather than just a supplier, they are less likely to demand extended credit. The aim is not to win contracts at any cost, but to win them on fair, sustainable terms that support both sides.

Building financial resilience in uncertain times

Every business faces unexpected challenges. Rising costs, supply delays, late payments and sudden changes in demand can all place pressure on cash flow. The businesses that cope best are usually those that have taken time to build financial resilience.

Resilience is not simply about holding large sums of cash. It is about planning ahead and understanding the numbers that drive the business. A simple but effective starting point is to maintain a rolling 12-month cash flow forecast. Updating this regularly helps you see when pressure points are likely to occur, so that action can be taken early rather than reacting when funds run short.

Another sound step is to build a small reserve fund. Setting aside a proportion of profits each month can create a buffer that covers at least three months of fixed costs. This can make all the difference when faced with a delayed payment or an unexpected expense.

Relationships matter too. Clear communication with suppliers and customers helps avoid surprises. If customers pay late, early contact and clear terms often improve recovery rates.

We also recommend using sensitivity analysis to test “what if” scenarios — for example, what if energy costs rise by 10% or a key customer pays two months late? Discussing these possibilities can highlight practical ways to strengthen your position.

A resilient business is one that can manage uncertainty with confidence and seize opportunities when others are forced to hold back.

Profitability through better management information

Many business owners make decisions based on instinct, but intuition alone can be unreliable. Having timely, accurate management information replaces guesswork with insight and leads to stronger profitability.

Management information differs from year-end accounts because it focuses on what is happening now and what is likely to happen next. A short monthly report showing key performance indicators can reveal issues before they become serious. Typical measures include gross profit margin, average debtor days, overhead ratios and cash flow trends.

Modern accounting software provides real-time figures that allow you to spot changes early. For instance, if sales remain steady but margins start to fall, it may signal higher costs or increased discounting. Acting quickly can prevent these trends from eroding profits.

Regular review meetings, even if only quarterly, make these reports more valuable. Discussing results with us can identify opportunities to improve efficiency, adjust pricing, or strengthen cash flow. Small improvements made consistently can produce meaningful gains over time.

Good management information does not need to be complicated. What matters is clarity and regular review. Once you have the right information in place, decision-making becomes easier, more confident and more profitable.

Well-structured information is one of the best tools for improving business performance and we can help you make full use of it.

Five goals every small business owner should set

Running a small business can feel like juggling endless priorities, but taking time to set clear goals is essential if you want your business to grow and remain sustainable. Here are five goals that every owner should consider.

1. Strengthen cash flow management
Cash is the lifeblood of any business. Aim to forecast your cash flow regularly, monitor debtor days, and build a buffer for unexpected costs. Even profitable businesses can run into trouble if they neglect cash flow.

2. Build customer loyalty
Repeat customers cost less to retain than new ones do to acquire. Set a goal to improve customer service, gather feedback, and introduce loyalty or referral schemes. Strong relationships are a foundation for long-term stability.

3. Embrace digital tools
From accounting software to customer management systems, technology can save time and cut errors. Make it a goal to identify areas of your business that could benefit from automation or more efficient systems.

4. Focus on compliance and risk management
Keeping up with tax, employment, and regulatory responsibilities avoids costly penalties. Set processes for filing returns on time, maintaining accurate records, and regularly reviewing insurance and legal protections.

5. Invest in yourself and your team
Your skills and wellbeing directly influence your business. Set goals around training, mentoring, or simply creating space to recharge. Encourage team development too,  motivated employees often generate new ideas and efficiencies.

By working towards these five goals, small business owners can balance immediate demands with longer-term progress. The key is to revisit and adjust them regularly, so they remain relevant as your business evolves.

Choosing the right way to buy a vehicle for your business

For many business owners, a vehicle is an essential tool. Whether it is for visiting clients, delivering goods, or simply keeping things moving, choosing how to finance a vehicle can have a big impact on cash flow and tax planning. There are several routes to consider, each with its own advantages.

Buying outright

The simplest option is to purchase the vehicle in full. This means your business owns it from day one. Buying outright avoids ongoing finance costs, but it does tie up capital. The tax advantage is that you may be able to claim capital allowances on the cost, reducing taxable profits. Cars with low CO₂ emissions attract more generous allowances, while commercial vehicles such as vans can often qualify for the full Annual Investment Allowance.

Hire purchase

Hire purchase spreads the cost of the vehicle over a fixed term. You make monthly instalments and become the legal owner once the final payment is made. Interest will be payable, but this option gives certainty over repayments and allows you to claim capital allowances on the vehicle as if you had bought it outright.

Finance lease

With a finance lease, your business pays to use the vehicle but never actually owns it. Instead, you may be able to extend the lease at a reduced cost or sell the vehicle on behalf of the finance company and keep part of the sale proceeds. The rentals are tax deductible, which helps to reduce taxable profits.

Contract hire

Contract hire is often called leasing. You agree to use the vehicle for a set period and mileage, paying fixed monthly rentals. At the end of the agreement, the vehicle is returned. This option keeps vehicles off your balance sheet and helps with budgeting, as servicing and maintenance can be included. The rentals are usually deductible for Corporation Tax, but restrictions apply if the car has high emissions.

Personal contract purchase (PCP)

Some directors use PCP agreements through the company. These combine monthly payments with the option to buy the vehicle at the end for a lump sum. The tax treatment is similar to hire purchase if the business owns the agreement, but careful thought is needed if it is held personally.

Final thought

There is no one best option. The right choice depends on cash flow, tax position, and how long you intend to keep the vehicle. Speaking with your accountant before committing can ensure the vehicle is financed in the most efficient way for your business.

What is the recent £150bn tech investment deal?

During the State Visit by President Trump, the UK secured a record-breaking £150 billion of inward investment from US firms. The package is intended to boost jobs, support growth, and advance the UK’s key industrial sectors, especially life sciences, advanced manufacturing, clean energy, biotech, AI and other future-facing industries under the UK’s Modern Industrial Strategy.

Key components of the deal

Here are some of the flagship commitments:

• Blackstone pledged around £100 billion over the next decade into the UK.
• Prologis will invest £3.9 billion, including use in the Cambridge Biomedical Campus and upgrading Daventry Rail Freight Terminal.
• Palantir agreed to invest up to £1.5 billion to help make the UK a defence innovation leader and create up to 350 jobs.
• Amentum will invest £150 million, creating over 3,000 jobs across areas like Glasgow, the Midlands and Warrington.
• Boeing committed to converting two 737 aircraft in Birmingham for the USAF, bringing about 150 high-skilled jobs.
• STAX, a US engineering firm, will commit around £37 million to expand UK operations, especially in emissions-reducing technology at ports.

Where the jobs and benefits are headed

The investment is forecast to create more than 7,600 high-quality jobs throughout the UK, covering not just London and the South East, but also Belfast, Glasgow, the Midlands and the North East. It includes major commitments in research and development and support for start-ups, particularly in biotech, AI and clean energy sectors.

Why it matters

This is the biggest commercial investment package ever secured during a UK state visit. It signals confidence from US firms in the UK’s economic strategy and global competitiveness. For business, tax, infrastructure, jobs, and innovation policy, it gives strong backing to the government’s plans.