Should your strategy be defensive or growth-focused?

Anna Stubbs • December 3, 2025

The latest edition of the Federation of Small Businesses’ (FSB) Small Business Index had some unexpected results when it comes to growth expectations of UK small businesses.

27% of businesses said they expected their business to shrink, close or sell up over the next year. This outweighed the 25% who predicted their business would expand over the same period. It’s the first time in the history of the SBI that expectations of contraction have outnumbered those of growth. And it underlines a growing trend.

Should you forget about growth and make your strategy more defensive?

Here are three key actions you can take to create a more defensive business strategy.


Improve your cashflow resilience

Focus on prompt payment by agreeing shorter payment terms with your customers and making sure you have credit control procedures in place to chase up any aged debt. This keeps cash inflows coming into the business, making it easier to meet rising costs.


Audit and optimise your entire cost base

Carry out a ‘line-by-line review’ of your business costs to identify and eliminate any non-essential spending across the company. Look for overheads that can be reduced and prioritise investments only in areas that can deliver immediate, measurable cost efficiencies.


Focus on core customer retention and value

Put your effort and resources into strengthening relationships with your most loyal and profitable customers. Reduce your dependence on high-cost, new-customer acquisition and look at nurturing your existing customer base. You should also review your pricing to make sure you’re offering value, but still creating healthy margins that will drive profits.



We can help you rework your strategy to reflect the challenging market

Talk to our team and we’ll work with you to review and update your strategy in a way that defends the long-term outlook of the business.

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