If Your Business Were Sitting an Exam, Would It Pass?

Picture the scene. It’s a Tuesday morning in June. You’re sitting at a small wooden desk that’s somehow far too small for a grown adult, the clock is ticking ominously on the wall, and someone’s just handed you a paper that begins: “Answer ALL questions. Time allowed: two hours.”

Your palms are sweaty. You haven’t revised. You’re not entirely sure what subject this exam is even for.

Now, what if I told you that every business — yours included — is essentially sitting an exam every single year? And that most business owners aren’t even aware they’ve been handed the question paper?

I’m Claire Markham, Managing Director of FH Manning Financial Services, and today I’m swapping my work attire for something a little more… sixth-form. Because there’s no better way to think about your business financial health check than imagining it as a school exam. Let’s find out if your business is heading for top marks, or whether it needs to stay behind after class.

Paper 1: Cash Flow — Show Your Working

If you remember nothing else from school maths, you’ll remember the words “show your working.” Getting the right answer wasn’t enough — your teacher wanted to see how you got there.

Cash flow is exactly the same. It’s not just about whether money is coming into your business; it’s about understanding the journey it takes. Is it arriving when you need it? Is it leaving faster than it should? Are you relying on an overdraft to paper over the cracks at the end of every month?

A business with healthy cash flow knows exactly what’s coming in, what’s going out, and — crucially — when. If you’ve ever stared at your bank balance thinking “but the profit and loss says we’re doing brilliantly…”, welcome to the cash flow paradox. You’re not alone, and no, it doesn’t mean you’ve failed the module. It just means it’s time to show your working.

The Money Advice Service’s guide to managing business cash flow is a useful free starting point if you want to get to grips with the fundamentals — but for a tailored approach to your specific situation, our Financial Planning service can help you build a much clearer picture.

Quick revision tip: Review your cash flow forecast monthly, not quarterly. For seasonal businesses especially, surprises in March can sting considerably less if you spotted them in January.

Paper 2: Tax Planning — Open Book Exam (But Are You Using the Book?)

Here’s the wonderful irony about tax planning in the UK: it’s essentially an open-book exam. All the rules are there, HMRC publishes them, your accountant knows them, and yet a staggering number of business owners still walk in and wing it.

Corporation tax, VAT, income tax on dividends, employer’s National Insurance contributions — the list of things that can quietly nibble away at your business wealth is impressively long. The good news? An awful lot of that nibbling is entirely preventable with the right planning.

I often speak to company directors who tell me they “sort the tax stuff in January.” My friends, January is when the exam is already over. Tax planning is a year-round discipline, not an all-nighter the week before the deadline. I wrote about this exact problem in my earlier blog post, Last-minute tax planning vs long-term strategy: which actually works? — if that sounds familiar, it’s worth a read.

For those who want to go a little deeper, HMRC’s official guidance on corporation tax is always a reliable reference point. And how pension contributions can reduce your corporation tax bill is something I cover in detail in a recent post — it’s one of the most powerful and underused tools available to company directors.

Exam tip: Speak to a qualified financial adviser about extracting profits efficiently — whether through salary, dividends, pension contributions, or a combination. The right structure can make a genuinely meaningful difference to what you keep.

Paper 3: Protection & Risk — The Bit Everyone Skips

We’ve all done it. In a school exam, you spot the section that looks hardest and quietly decide to come back to it. Then time runs out.

Business protection is that section.

Ask yourself honestly: if you — the key person in your business — were unable to work for six months, what would happen? Would your business survive? Would your staff be paid? Would your family be financially secure?

Key person insurance, shareholder protection, relevant life cover — these are not exciting topics. They’re not the sort of thing anyone puts on a vision board. But they are, without question, the answers that carry the most marks. Skipping them is fine right up until the moment it really, really isn’t.

The Association of British Insurers has a helpful overview of business protection insurance for anyone who wants to understand the landscape. And our Protecting Your Loved Ones service includes appropriate cover for business owners — I’d strongly encourage a conversation if this is an area you’ve been putting off.

Don’t leave this question blank. The cost of the right cover is almost always far less than business owners expect. Have the conversation. Even if it’s just to find out what the question actually is.

Paper 4: Retirement Planning — The Long Essay Question

Every exam has that one question worth loads of marks that requires actual thinking, proper structure, and more than three lines of waffle. In business financial planning terms, that question is your retirement.

When do you want to leave? What will the business be worth? Are you planning to sell, transfer to family, or wind it down? What income do you need in retirement, and where is it coming from?

These are big questions. Intimidating questions. The kind you might be tempted to answer with “I’ll worry about that later.” But the later you start, the fewer marks you can earn. Pension contributions as a company director, in particular, can be extraordinarily tax-efficient — and the window to make the most of them is not infinite.

Our Income Planning service is designed around exactly these questions — researching all pension options available and building a plan around your particular circumstances.

If you’re also thinking about what happens to the business itself when you step back, it’s worth reading our post on Business Transition — Have you considered yourfinancial implications? The financial side of succession and exit is often the last thing business owners think about — and it really shouldn’t be.

For independent context, the Pensions Advisory Service (MoneyHelper) is an excellent free government-backed resource on retirement and pension planning.

Exam technique: You don’t need all the answers right now. But you do need a plan — and ideally, someone to help you write it.

Extra Credit: The Questions Most Business Owners Don’t Know to Ask

Beyond the core papers, the highest-achieving businesses tend to have thought about a few bonus areas:

These aren’t trick questions. They’re the kind of forward-thinking that separates businesses that are merely surviving from those that are genuinely thriving.

So… Did Your Business Pass?

If you read through those sections and felt a quiet, creeping sense of “oh, I really should look at that” — you’re in excellent company. The vast majority of business owners are brilliant at what they do. The financials, the planning, the protection? That’s a different skill set entirely, and it’s absolutely fine not to have it all figured out.

That’s what we’re here for.

At FH Manning Financial Services, we work with high-net-worth individuals, company owners, and senior directors to make sure the financial side of business is working as hard as they are. No jargon. No judgment. And definitely no small wooden desks.

If you’d like some wider reading before we chat, our News & Insights page has a growing library of practical, honest articles on everything from tax planning to estate management. And if you’d like a proper financial review — a real exam, not just the fun version — I’d love to have a conversation.

(If you’d like a more in-depth look at where your business finances stand, our Business OwnersSupport Service is specifically designed for company directors and senior managers who want expert financial guidance without spending hours away from their desk.)

Get in touch with the team at FH Manning Financial Services: www.fhmanning.co.uk | 01507 527 383 | mail@fhmanning.co.uk

FH Manning Financial Services. Intelligent financial planning for people who mean business.

This blog post is intended for general informational purposes and does not constitute personalised financial advice. FH Manning Financial Services Ltd is authorised and regulated by the Financial Conduct Authority, Reference Number 114341. For advice tailored to your individual circumstances, please speak with a qualified financial adviser.