Q: With the Government warning of “significant economic uncertainty” what can small firms, like my own, do to make sure they are prepared for the unexpected? Indeed, can you really prepare when you don’t know what is going to happen next?

A: After the experience of Covid we should have become used to uncertainty and be prepared for any future economic shock, but I’m not so sure we have. The big lesson we have learnt from Covid is that we can’t predict the future.

Over the last 25 years, any director, school governor or charity trustee will have completed a risk analysis chart – assessing the probability and impact of every major problem. 

But, sadly, the analysis seldom unearths an unexpected disaster. Full marks to any organisation that was so ahead of the game they could forecast Covid, the invasion of Ukraine, spiralling energy costs and double digit inflation.

This prudent approach to forward planning is natural territory for financial controllers, some of whom seize on major risks like manna from heaven and relish becoming the prophet of doom. 

Although this analytical approach may help, it almost certainly ensures that you will adopt a similar risk-averse strategy to your competitors. The steady hand of prudence may keep day-to-day business on track but no one can anticipate events that come into the category of ‘I never saw that coming’.

Whoever you are and whatever your business, it is sound to have plenty of money in the bank, but you never know how much is enough. 

In March 2020 our cash balance at Timpson was at an all time high of £19m. We thought we were bulletproof until Covid closed all our shops and we started losing £1.5m every week. Within days we were securing a £40m facility to ensure our long term survival. 

Despite that experience my first tip is to watch the cash, stay away from any temptation offered by attractive loans and avoid being at the mercy of lenders. 

If things don’t go to plan, you could suddenly become obsessed with covenants that originally seemed of little consequence.

Next, recognise the strengths and weaknesses of your current business. The best insurance against a hostile economic environment is to be really good at what you do. 

Being the very best in your field should mean, when the chips are down, every competitor will fail before you do. During the dotcom revolution, we heard much about ‘first mover advantage’. At the other end of the business cycle, more money is probably made by the last man standing who has a dominant share of a declining market.

So be in a position to claim ‘if we can’t survive, I’m pretty sure no-one else will’ but never take anything for granted, your business and the market it serves is always on the move. 

Another tip — while facing economic uncertainty always be aware of how the world around you is changing and keep your business up-to-date. 

In the 1960s, when we were about to enter a similar economic rollercoaster to the one that could be round the corner (with a 20pc plus inflation and a horrific fuel crisis) we fortunately recognised that our main worry wasn’t economic uncertainty.

Our biggest threat was a long term decline in the demand for shoe repairs. Key cutting saved the day and is now the biggest part of our business. The change in our customer demand was far more important than the unpredictable economy.

Here is a happy thought – the dramatic events we face, during an uncertain future, will provide more opportunities than banana skins. As the roulette board of our economic future spins in the casino of commerce, those business leaders who put their chips on the winning numbers will be the top entrepreneurs of the 2030s.

So, to sum up: watch the cash like a hawk, during the torrid time ahead. 

Try to make sure that the future of your business is determined by you and your management team. Don’t allow institutional shareholders, creditors or venture capitalists to pull the plug because you fail to fulfil your covenants.

Second, stick to the knitting – you make money by being good at what you do. Don’t approve any cost cutting plan that cuts out people on the front line without saving anything on your overheads. Mistrust any plan proposed by your finance director that doesn’t propose economies in the finance department.

Next, keep up to date. Whatever happens to the economy your customer taste will continue to change. Look out for the new opportunities that are certain to turn up.

Finally you will need a few lightbulb moments, lots of luck and the flair to spot how to make money out of your bits of good fortune.

Sir John Timpson is chairman of the high-street services provider, Timpson.

Send him a question at askjohn@telegraph.co.uk and read more answers from his Ask John column here