Why We're Helping First Year Businesses SurvivePosted: Nov 17, 2025

If there’s one thing we’ve learned after decades in the insolvency area, it’s that too many businesses fail unnecessarily. That is particularly true for first-year businesses.

The Reason Businesses Fail

In our experience, a first-year business will often fail, not because the idea was bad, or the person behind it didn’t care or didn’t work hard enough. In fact, these are often the reasons that people hang on to their business far too long. Sadly. An apparently increasing number fail partly because they didn’t see what was coming, they didn’t have the right support, or nobody gave them the warnings when they were falling into some common traps.

In short, they didn’t get the right advice at the right time.

Not that there is a shortage of good advice out there. There is plenty on how to write a business plan or how to understand the big ‘why’ of your business, and how to nurture your dream. What there seems to be less of is the not quite as nice to read about truth of how hard it can be dealing with the dangers your business can, and probably will, encounter in the first year.

We’ve spent decades working with businesses in distress. We’ve seen the impact it can have when a business becomes insolvent. It impacts the people behind it, the owners, the families, the staff and even their suppliers and customers. We do our best to treat our clients with empathy and understanding for these reasons. Businesses, from day one, are part of your life and often the lives of everyone around you.

So, with that in mind, we decided to use our experience to help businesses in that first, highly vulnerable, year of trade.

We Know the First Year Is the Hardest

Starting a business is one of the most exciting things you can do, but it comes with a risk. You will usually be swapping a regular income for a variable one and committing to long hours. There is a huge learning curve to think about. So, yes, you may have the dream, but you also need the reality to ground you.

According to the Office for National Statistics, around 20% of UK businesses don’t make it past their first year (ONS, 2023). It's a scary statistic, but what it doesn’t tell us is why.

The real story behind those numbers is that these businesses often close due to one or more avoidable problems that weren’t spotted and responded to early enough.

Anyone who has run a business knows what the first year is really like. The long hours. The unexpected bills. The slow months. The mental strain. The pressure to turn a dream into an income. All these are things that you need to prepare for so that the passion of ownership isn’t overwhelmed by real-life problems.

That’s Why We’re Creating These Pages

We’ve launched a new section on our website, aimed entirely at businesses in their first year of trading. It’s simple, straightforward, and built from the situations we’ve dealt with time and time again.

It’s not about preaching or ticking boxes. It’s about sharing what we’ve learned, in the hope that a little bit of insight can help someone avoid a lot of trouble later.

When you have a successful business, as we do, combined with working in the insolvency world, you get a pretty clear perspective. So, why would we not share that knowledge? If, because of some insight we share, we only help one business avoid a cash flow crisis, if we help ten businesses see warning signs early, if we can only help a hundred people understand what they’re walking into, then it’s worth every bit of the time we’ve spent putting this together.

What You’ll Find on Our New Support Pages

These new resources are designed to give first-year businesses a real-world look at what to expect. We want you to think about what to prepare for.

They cover areas such as:

Why so many businesses struggle in their first 12 months
The warning signs that trouble could be brewing
Common financial traps
How to build a maintain a sustainable cash flow plan
What you can do now to protect your business later

We’ve also binned the jargon. There are no academic lectures, no trite sayings or flimsy ‘hacks’. There is just honest, practical advice based on years of experience helping businesses when things haven’t gone to plan.

Experience is Meant to Be Shared

We’re not writing these pages for clicks or credit. We’re doing it because we’ve seen what happens when businesses don’t have the right knowledge early on. If passing on some of that experience means fewer insolvencies, less stress, and more businesses making it past their first year, then we’re all for it.

We hope you’ll take a look. We think it could make a real difference. As counterproductive as it may sound from an Insolvency Practitioner, we would actually rather see you succeed in the first year than become one of the next round of statistics.

Visit our new First Year Business Support section and download your free guide here

Back

Apparently, the number of businesses failing in the first year is rising. Maybe part of the reason is that they didn’t see what was coming, they didn’t have the right support, or nobody gave them the warnings when they were falling into some common traps. In short, they didn’t get the right advice at the right time.

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Government Extends Help Again but are we just kicking the problem down the road?

This is the fourth time I have written about the Government extensions of the insolvency provisions brought in ... more

I the first of these BBL articles we looked at your options if you are struggling to pay your Bounce Back Loan payments. If you haven’t read that article, it may be worth reading it now because we discuss the routes available to you via the ‘Pay as you Grow’ options. In this article, we want to focus on what happens if your financial situation has progressed to a critical stage.  There is a lot of uncertainty and conflicting opinions so, we will try to answer the main points raised by the question ‘what happens if I can’t pay back my Bounce Back Loan’?

What to do about your Bounce Back Loans (BBLs) Part 2 – What if you cannot pay it.

I the first of these BBL articles we looked at your options if you are struggling to pay your Bounce Back Loan ... more

Bounce Back Loans are becoming a big problem area and we may only be scratching the surface of the impact they may well have on business. Thinking back to when they were first announced, they may not have been the covid response many limited companies wanted, but they did potentially offer a stop-gap solution.

What to do about your Bounce Back Loans (BBLs) – Part 1

Bounce Back Loans are becoming a big problem area and we may only be scratching the surface of the impact they may ... more

The Government has announced a new scheme to help individuals with debt problems. The scheme is described as ‘Breathing Space’ and comes into effect on 4 May 2021.

New Scheme Announced for Individuals with Debt Problems.

The Government has announced a new scheme to help individuals with debt problems. The scheme is described as ... more

I also think it is fair to say that Pre-Pack sales by an Administrator have had a high level of press coverage. All the evidence suggests that a Pre-Pack sale commonly leads to a better return to creditors than a forced sale shut down. But equally, creditors are understandably concerned because the sale is conducted very quickly following the appointment of the Administrator and often, they are the last people to hear about it. This concern is always worse when the sale is to a connected party.

Pre-Pack Sales to Connected Parties – The New Evaluator Process

First of all, it is fair to say this blog is very technical and probably more for our professional contacts, so if ... more

The Insolvency Service produces monthly figures for both corporate and personal insolvencies and as mentioned previously, I rarely comment on them. Partly because insolvencies are seasonal, so generally increase in the first and third quarter of the year and decrease in the second and fourth quarter and partly because there is not much to talk about.

Latest Insolvency numbers are released for March 2021.

The Insolvency Service produces monthly figures for both corporate and personal insolvencies and as mentioned ... more

The answer to the question ‘when is a good time to close your solvent business’ is never an easy one. However, with capital gains tax and asset disposal relief both still working in your favour, if you are looking to close your solvent business then 2021 or early 2022, may well be the time to make the move. If not, you could see a much less favourable tax landscape in the future.

Good news for those planning a Members’ Voluntary Liquidation (MVL)

The answer to the question ‘when is a good time to close your solvent business’ is never an easy one. ... more

Groundhog Day - Government Extends various measures to assist struggling business

Why Groundhog Day you ask? Over the last 12 months, I have posted about various Governments measures brought in ... more

VAT Deferrals – What can you do now if you still have not got the funds to pay?

Believe it or not, it has been almost 12 months since businesses in the UK were first given an answer to the ... more

I thought I would provide some thoughts on how the change may affect you because, despite the budget not quite producing the fireworks some were predicting, it did have a lot worth discussing in there.

Budget 2021 – Thoughts from an Insolvency Practitioner

Like most people, I get several excellent emails and budget summaries every year and I would guess you do too. ... more

The Insolvency Service produce monthly figures for both corporate and personal insolvencies and to be honest I rarely comment on them. Partly because insolvencies are seasonal so increase in the first and third quarter of the year and decrease in the second and fourth quarter and partly because there is not much too talk about.
 
However, I feel that there is a clear trend and whilst on paper the trend appears to be good news it hides several issues which will hit the economy later in the year.

Company Insolvencies in January 2021 50% lower than January 2020, but is this good news?

The Insolvency Service produce monthly figures for both corporate and personal insolvencies and to be honest I ... more

Smart Business Recovery is pleased to welcome a new member of the team

Meet Sharon – an old and new colleague.

If you have been reading our blogs or social media recently you will probably have noticed that we are very busy at ... more

Looking ahead isn't always easy but despite 2020 begin one of the most unusual years ever for many of us, there are some signs of stability ahead.

Some optimism, some hope and a big dollop of realism – Insolvency and business in 2021

I am already on the third draft of this blog. Every time I managed to get pen to paper the Covid situation or ... more

Over the last few days, a number of extensions have been announced which it is hoped to assist business affected by COVID 19. These are as follows;

Government Extends various measures to assist struggling business

Over the last few days, a number of extensions have been announced which it is hoped to assist business affected by ... more

Will I get my money? The order of payment for creditors.

There is no such thing as a simple way to close a business. Whether it is an administration or a liquidation, the ... more

What’s left for you? What will the change to HMRC preferential creditor status really mean to SMEs?

Up until the early 2000s HMRC were a preferential creditor in cases of insolvency. When this changed in 2003 it was ... more

The Government Announces new rules regarding Pre-pack sales to be implemented.

The Government has announced that new rules will be brought into legislation as soon as possible. The following was ... more

Measures put in place to protect businesses from insolvency will be extended to continue giving them much-needed breathing space during the coronavirus (COVID-19) pandemic, the government announced today (24 September). UPDATED 27 November 2020

Government gives businesses much-needed breathing space with extension of insolvency measures

UPDATED 26 NOVEMBER 2020 The Government has announced extensions to previous temporary measures relating to ... more

Taking stock – Are your customers stock levels a threat to your cashflow?

There is a potential situation arising that could soon be causing some insolvency related issues, cashflow problems ... more

Changes to the regulations surrounding insolvency could spell trouble for SMEs. This article takes a look at what some of these changes are and the impact they could have on cashflow.

Supplier beware – Credit control and the Corporate Insolvency and Governance Bill 2020

Insolvency legislation rarely makes the news which is probably why one of the biggest changes to the way it works ... more

Dividends, Overdrawn Loan Accounts and Insolvency - Updated

This is a very common problem in insolvency and here is the reason why!! At some stage, a director of a new ... more

Keep your cashflow forecast up to date – 5 tips and 1 warning

Why then are we bothering to dedicate a full article and video to cashflow forecasts if they are so common? Well, ... more

Since the Covid-19 pandemic insolvency has been on the minds of many business owners. Pressing the panic button is unlikely to be the right response though.

Am I insolvent? – Why pressing the panic button may not be the best idea.

The initial shock of the lockdown. When the government announced the Coronavirus lockdown our telephone began to ... more

Bankrupt, Insolvent or in need of rescue?

What happens when you reach out to an Insolvency Practitioner? I doubt any business owner ... more

What are employees entitled to in an insolvency process?

One of the major aspects of any insolvency is what will happen to the employees. Any news story in relation to an ... more