Staying ahead of the rising costs of doing business in Ireland in 2026

What is the outlook for Irish SMEs this year? Paul O’Donovan shares some insights.

From new regulations and rising payroll costs to persistent economic pressures, Irish SMEs are navigating a complex environment in 2026. What is the outlook for Irish organisations, and what can be done to weather the storm?

Paul O’Donovan has identified some key areas where Irish businesses should be focusing their efforts, starting with checking their numbers. 

Irish businesses usually set their budgets in October and a lot can happen in 4 months.

It’s time to check if your 2026 budget is working well or needs adjustment, especially with regards to cash flow management. Review your Q1 numbers to get a clear picture of where you’re at, so you can make adjustments now rather than later.

If there are issues, pinpointing them early means you can get the right advice implemented as fast as possible. Paul recommends Irish businesses implement bi-monthly, if not monthly, management accounts so they can compare what they’ve budgeted with what’s actually happening.

Key Focus Areas Irish SMEs in 2026

1. Financial planning and cash flow analysis

As we’ve mentioned above, robust financial management will be key in 2026. Payroll is a stressor for some with a minimum wage increases and pension changes, including auto-enrolment. Many businesses are also seeing increasing overheads so vital to ascertain what your pricing structure is and capacity is, and how you see business going in the next few months.

Successful businesses will ensure they fully understand their changing financial positions and act strategically. Ensure you have detailed budgets and cash flow projections to maintain stability and fund growth, and that your budgets are keeping up with your business’s number.

2. Navigating changes and funding slowdowns

The banking process has slowed considerably so if you will need funding, act early to secure it. Businesses need to plan and apply for funding well in advance of when the money is actually needed, rather than waiting for the critical moment to ask. 

We recommend that businesses think green; one of the conditions that the banks are looking at is how sustainable companies are into the future and what they’re doing from a green point of view. 

For larger SMEs, changes in audit regulations and standards are a critical area to watch. Upcoming changes will have a big impact on medium-sized companies, with turnovers in the range of €30 to €50 million, which are being hit by a lot of regulation and changes in reporting standards.  

3. The staffing and housing challenge

The housing crisis continues to be a major obstacle for businesses needing to attract and retain staff. In Cork, we have seen a significant increase in corporations purchasing housing to accommodate their employees. Housing is now treated as a direct business expense by some firms and employers may need new approaches to attract and retain key staff.

4. Opportunities for growth: M&A and Succession Planning

Despite the challenges, significant opportunities exist this year. Mergers and acquisitions (M&A) and succession planning are one area to review as there is a lot of movement in the current economy. Many Irish business owners are reaching retirement age, creating a wave of exits for some – and opportunities for others.

5. Exploring grants and tax credits

Businesses should not overlook available government support. Many businesses are not fully exploring available grants and funds, and talking to an expert can ease complexity here.

Paul sees several opportunities that are often overlooked:

• Enterprise Ireland (EI) and IDA Ireland grants: There are substantial grants available for manufacturing, processing, AI, IT, and engineering sectors.

• R&D Tax Credits: The R&D tax credit, which was increased in the budget, is another underutilised resource.

Looking ahead

Irish businesses should be continuing to explore green options, given their growing importance to funding criteria. If you think you may need loans or funds for expanding in the future – in the next two years, or even ten years down the track – “sustainability plans will be key to long-term viability and meeting future requirements from banks and investors alike”.

While the start to 2026 presents challenges – such as costs, regulations and housing – it also offers a lot of opportunities for business owners. For businesses that engage in proactive financial planning, 2026 has plenty of potential.