Business health check: the five-point plan to sharpen 2026 performance
Businesses thrive on certainty, something that is frequently in short supply. That’s why now is a good time to check your business has the tools to withstand whatever the next 12 months might send your way.
Prepare for what you know about – and what you don’t.
Planning for the year requires getting comfortable with various degrees of uncertainty.
Donald Rumsfeld, a former US defence secretary, was much derided two decades ago for his notorious ‘known knowns’, and ‘unknown unknowns’.
Now, these terms have seeped into common parlance and provide quite a handy reference point.
For business leaders, they serve as a reminder that it’s important to insulate firms from things we know will happen, are likely to happen, and also from those events we can’t possibly predict
There are several knowns for 2026. Interest rates are coming down (at Investec, we believe the Bank of England could take them as low as 3.25 per cent by the end of the year, depending on inflation); commodity prices, including oil, are moving lower, although precious metals like gold are soaring; and the US dollar, the world’s primary reserve currency for more than 60 years, is expected to be even weaker, having suffered its worst annual performance since 2017 last year.
Meanwhile, on the geopolitical front, US intervention in Venezuela reminds us of the potential for further instability ahead. In this type of environment, business leaders need to be proactive to avoid getting caught off guard.
Even once-successful businesses can fail.
The last year has seen a dramatic rise in the number of small to medium enterprises struggling to adapt to financial conditions. For the third quarter of 2025, 55,530 firms were in ‘significant’ or ‘critical’ financial distress, according to the Business Distress Index from insolvency experts Real Business Rescue. This was up 78 per cent on the previous 12 months.
Businesses have had to contend with higher taxes, rising prices and high borrowing costs.
High-street retailers and other consumer-facing industries, such as hotels and tourism, have borne the brunt, but even the most profitable businesses are aware of the pressures.
How to set your business up for success in 2026
A New Year health check focused on treasury and risk solutions can help business leaders ensure their businesses are prepared and not simply reacting to events.
Here are some of the most important elements to consider:
1. Do you have visibility over your cash flow?
One of the most common reasons why businesses fail is poor cash flow management. Liquidity planning is essential before the new financial year gets underway (which, for many firms, starts in April). A firm can be focused on growth but run out of working capital; it may have invested cash into its business but failed to build up sufficient reserves to cover possible emergencies or bumps in the road, or it may not have sufficient visibility of its day-to-day global inflows and outflows. Even with strong sales and a bulging order book, if a business can’t keep tabs on its cash flow, growth can stutter and it can still fail.
A health check should question whether you’re optimising your business’s financial structure to run your company as efficiently and profitably as possible. For cash-rich businesses in particular, this should include asking whether surplus balances are working as hard as they could be — generating an appropriate yield while still maintaining the level of access and flexibility the business needs. Holding excess cash in low-yielding accounts can be a missed opportunity, especially in a shifting rate environment where liquidity and return no longer have to be mutually exclusive.
2. Are you managing foreign exchange risk?
For any company conducting any amount of its business overseas, fluctuations in currency rates present a real risk.
Both the US dollar and pound sterling have weakened against the euro over the course of the last year, heavily influenced by factors such as trade tariffs, interest rate differentials and geopolitical uncertainty. Volatility could easily escalate were global trade relations to become more unpredictable. Businesses need to review their currency exposure early, instead of only reacting when big swings occur.
This should include everyday cross-border payment flows to ensure international payments are integrated into cash and liquidity planning. It’s imperative to plan for volatility instead of hoping for greater certainty.
3. Are you prepared for interest rate changes?
Businesses should build interest rate and funding considerations into their models as they plan for the year ahead. Interest rates are forecast to come down in the UK, , which should mean cheaper borrowing.
Reduced costs for new and existing business loans should free up cash flow for operations and growth. How could this effect running costs and investment plans for your business? How much will the unknowns, such as further changes to UK tax rules in the next Autumn Budget, affect these plans?
4. How resilient is your business’s performance if the financial environment changes?
What happens to your company in the best-case or the worst-case scenario? How would you respond if the economy contracts, or expands more than expected?
Stress-testing your assumptions for different economic scenarios helps you plan for each situation and leaves you better prepared.
5. Does your governance need tightening up?
The New Year is a perfect opportunity to look again at your governance controls and see where improvements can be made, where further controls are required or where current financial reporting is insufficient.
Finding the potential blind spots can make your business more resilient for the future.
Think now, save later.
In the years since the global pandemic, companies have had to bend to many changing business environments – from sharply fluctuating interest rates to recalibrated supply chains and shifting political priorities.
The companies that have proved most resilient didn’t necessarily anticipate change well in advance, but they did take deliberate steps to both protect and strengthen their businesses for whatever came next. A tight focus on treasury and risk solutions can reinforce strategy, helping organisations become more proactive and less reactive.
Discover more at Investec Treasury Risk Solutions
Important information: The views expressed are those of the contributors at the time of publication and do not necessarily represent the views of the firm and should not be taken as advice or recommendations.
Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 172330. Registered in England and Wales No. 489604. Registered office at 30 Gresham Street, London EC2V 7QP. Member of the London Stock Exchange.
By Kiran Russell
Head of Corporate Foreign Exchange Dealing
Kiran leads the foreign exchange dealing desk at Investec which provides tailored FX risk management solutions for corporate and institutional clients. The team, which comprises FX strategists, structurers and dealers, produce insightful market commentary and analysis to help clients make informed decisions.
