For business owners, perhaps the most pressing question is not around the wider implications of the situation in the Middle East; it is closer to home. If costs rise again, supply slows again, or customer demand dips again, could your business cope?

Financial Resilience and the Current Iran Conflict.Posted: Mar 15, 2026

For many UK business owners, a war in the Middle East can feel like something happening a long way away. The reality is often very different. The effects can travel quickly through oil markets, shipping routes, travel confidence, insurance costs and international trade networks. For businesses already operating on tight margins, that kind of disruption can turn an uncomfortable position into a dangerous one.

For business owners, the most pressing question is not around the wider implications of the situation in the Middle East; it is closer to home. If costs rise again, supply slows again, or customer demand dips again, could your business cope?

Why this matters to UK businesses

As you may know, Iran sits close to one of the most strategically important energy and shipping corridors in the world. As an almost immediate result of the conflict, oil prices have surged, dropped, risen again, and we are now seeing the results at the pump, and wider shipping disruption is also affecting the supply chain.

So, even if your business does not import directly from Iran or the Gulf, you can still be hit through fuel prices, packaging costs, freight surcharges, supplier price rises, delayed deliveries and weaker consumer confidence. It will almost certainly feed inflation and probably interest rates. In other words, this is not just a problem for oil companies or international traders. It can hit ordinary UK SMEs through the back door.

How the conflict could push up costs

The first pressure point is energy. If oil and gas prices remain elevated, businesses can see costs rise in several areas at once: transport, heating, electricity, manufacturing inputs and distribution. That can be especially painful for firms already dealing with thin margins or fixed-price contracts.

The second is freight and logistics. Shipping disruption in the Middle East does not just affect one region. It can cause rerouting, delay vessel schedules, increase insurance costs and create congestion elsewhere in the system. A delayed shipment in one place can therefore leave a UK manufacturer, wholesaler, retailer or hospitality business short of stock several weeks after the event.

The third is inflationary pressure. If suppliers are paying more for fuel, transport, or raw materials, those costs will undoubtedly get passed on. Some businesses are in a position where they can absorb that for a short time. Most cannot, and some find themselves squeezed in the middle, unable to raise prices without losing work but unable to stand still without damaging cash flow.

So the question is, how resilient is your business to these possible, and very likely, changes? Here are a few things that could flag up a problem.

Resilience flag 1 - Supply chain problems to watch for

Supply chain disruption does not always look dramatic at first. It often begins with smaller warning signs:

Suppliers are asking for faster payment.
Longer lead times.
Unexpected carriage surcharges.
Reduced stock availability.
Price changes on repeat orders.
Difficulty sourcing imported components or materials.

A UK company may seem a safe, local option, but crucially, it could buy from a wholesaler that relies on raw materials, energy inputs or shipping routes affected by the conflict. That means the risk can move through the chain even when the immediate supplier looks local.

This is why directors should avoid assuming they are safe simply because they do not trade with Iran or affected areas directly. In a stressed global market, indirect exposure can still hurt.

Resilience flag 2 - Which sectors could be particularly vulnerable?

Some sectors, as we saw after the start of the Ukraine war, are more exposed than others when energy, transport and international shipping are under pressure.

Retail - Retailers can be hit by higher import costs, weaker consumer spending, rising delivery charges and margin pressure on everyday goods.
Transport and logistics - Haulage firms, courier businesses, logistics operators and fleet-heavy companies are obvious candidates for difficulty when fuel costs rise.
Hospitality - Hotels, pubs, restaurants and venues often suffer from rising food, drink, laundry, cleaning, utility and staffing-linked overheads all at once.
Holiday providers and travel-related businesses - Holiday providers, tour operators and travel businesses selling trips to affected or nearby destinations may face cancellations, lower confidence, refund pressure and disrupted bookings.
Businesses trading with the Middle East and affected areas - Importers, exporters, wholesalers, engineering firms, specialist manufacturers and service providers with customers or suppliers in the Middle East may face delayed payments, shipping interruptions, contract disruption and exchange-rate or insurance issues.

So, what can you do immediately to test your resilience to the crisis?

Immediate actions to make your finances more secure

A resilience test is not about panic. It is about finding out whether your business could withstand another shock before that shock does real damage.

Stress-test your cash flow - Take your quarterly, 6-month or annual cash flow forecast and then test it under pressure. What happens if sales fall by 10%? What happens if a key supplier raises prices by 8%? What happens if a major customer pays 30 days late? A business can look viable on paper but still run out of cash in the real world. So take the time to find out where the money will be.
Review supplier dependency - Identify which suppliers are critical, which goods or materials are hard to replace and where you have single points of failure. Then look for alternatives and cost them out! You may never need them, but backup options matter when lead times start slipping.
Protect margin early - Do not wait until rising costs have already caused serious harm. Review pricing, contract terms, fuel surcharges, minimum order values, product mix and any other relevant areas. Some businesses need to reprice carefully and commercially. Others need to stop low-margin work that no longer makes financial sense. Turnover is not the same thing as strength. Work that drains cash can make a difficult situation worse.
Tighten credit control - Uncertainty and late payment risk go hand in hand. Chase debts promptly, review customer credit limits, issue invoices quickly and keep a close eye on slow payers. Cash tied up in the ledger can become a major problem if your own suppliers start demanding faster payment.
Cut non-essential cash leakage - Pause spending that does not directly support revenue, service delivery or stability. That does not mean slashing blindly. It means being disciplined. Review subscriptions, discretionary projects, underperforming marketing spend, excess stock purchasing and non-critical capital outlay. Try to avoid cutting marketing, sales support costs and, obviously, budget for essential training.

What your resilience test should tell you

Once you have done this review, ask yourself some harsh but necessary, direct questions:

Can we survive a meaningful rise in costs?
Can we absorb delayed customer payments?
Can we cope with supply interruption, and for how long?
Do we have enough working capital to take the potential hit?
Are we relying on hope rather than evidence?

If the answers are uncomfortable, then they are giving you useful information. It gives you a chance to act while options still exist. Most of all, be honest about that last one. You cannot run a business on hope, only on facts. We see a lot of insolvencies where hope led the directors to make matters worse.

Do not wait if an insolvency risk is starting to show

This is the part many directors put off for too long.

If your resilience test shows that your business could not withstand another major financial shock, take action now.

Waiting will always reduce your options. The earlier you take advice, the greater the chance there is of protecting the business, managing creditor pressure, improving cash flow and avoiding a deeper insolvency problem. By contrast, continuing to trade while ignoring clear financial warning signs can make matters worse for the business and for directors personally.

A crisis in the Middle East may be outside your control, but your response to it isn’t.

That is why now is the right time to test resilience and test it honestly and dispassionately. If your figures suggest the business is vulnerable, take it seriously. If the picture suggests insolvency may be approaching, call us and get advice straight away…Otherwise, you are waiting for a crisis to make the decision for you.

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