Succession planning prolongs life of business says ACCA

STATISTICS show that some 17,000 companies are currently being wound up each year, but ACCA (the Association of Chartered Certified Accountants) says that approximately 30% of these closures are not because their business fails, but because their owners do not make effective business succession plans.

Robin Jarvis, Head of Small Business at ACCA, said:- "Many owners unfortunately, do not make sufficient arrangements for the future of their business in the event of their retirement. The decision whether to sell a business or pass on ownership to the next generation, should be considered as soon as possible and accountants can help. Qualified accountants are the most frequent source of business advice to small firms and can play key roles in succession planning. They will know the business of their clients and can provide objective and expert advice, specifically on finance and tax considerations. They can also help with all sorts of succession situations relating to the individual circumstances of a business."

In the UK, only about 5-15% of family firms survive to the 3rd generation, reflecting the fact that many small firms maybe run on a 'lifestyle' basis, rather than with a view to creating a cross-generational enterprise. Age-related succession failure is high and, apparently, on the rise. Research published by ACCA has found that involvement in succession issues was quite substantial with medium-sized accountancy practices, running to 10-20% of the total fee income from clients. However, there still appears to be a reluctance on the part of the business owner to consider succession issues - when they eventually do, it is sometimes too late for the accountant to provide optimal professional advice.

Robin Jarvis added:- "Almost as soon as a business is established, it makes sense to think about succession planning. Business owners need to be encouraged to think what they hope to achieve from their eventual withdrawal from the business. Failure to plan effectively for the future not only affects the survival of the firm in question, but can also have serious implications for local employments and supply chains and, therefore, the local economy."

The European Commission estimates that 1/3rd of all the enterprises in the EU will change hands over the next 10 years, involving around 600,000 SMEs and 2.4 million jobs each year. Unsurprisingly, governments around Europe are becoming concerned about the risks involved in this process.

Local diabetes care:- Access all areas

PEOPLE in the North West can now find out how their local NHS diabetes services are performing. ‘Your Local Care 2005’, an online tool launched today by Diabetes UK, provides local information on all aspects of diabetes care including comparisons to other parts of the country. The information can be accessed through the Diabetes UK website (www.diabetes.org.uk).

To coincide with the launch of the tool, the report ‘Your Local Care 2005’ published this week, reveals that significant improvements are still needed in paediatric care. Only 15% of Primary Care Trusts (PCTs) in the North West have made improving paediatric care a priority in their Local Delivery Plans. This at a time when 85% of children with diabetes in England are not reaching recommended blood glucose levels. The report also shows that diabetes specialist nurses are over-stretched with an average case load of 82 children. Such a case load does not allow nurses the time to provide the care children need.

“The future health of children with diabetes is being put at risk, yet only 15% of local NHS services have included improving the situation in their local plans. We cannot wait until our children start to lose their sight or need kidney dialysis before we focus on their care. The dedicated doctors and nurses are doing their best, but they need the full support of the NHS,” said Julie Byron, North West Regional Manager at Diabetes UK. “We are asking people with diabetes to access the information from our website and demand better services from their PCT.”

The following table shows the regional variations for prioritising improved paediatric care and the ratio of specialist nurse to children.  (Response rates to these questions were 50 and 35% respectively.)

Across England, other key findings from ‘Your Local Care 2005’ show that at a national level progress has been made in the initial assessment and care of children. 70% of PCTs have written protocols compared to 59% in 2004. In addition, the provision of retinal screening has increased with 66% of people with diabetes being screened for retinopathy compared to 56% last year. However, the target is that 80% of people are offered screening by April 2006, rising to 100% in 2007.

However, more has to be done to improve psychological support for all people with diabetes. Only 46% of PCTs provide services for children, and 30% for adults. All people with diabetes have to be offered access to structured education by January 2006, but just 56% have prioritised it.

‘Your Local Care 2005’ online tool and report were produced for Diabetes UK by independent healthcare company Dr Foster.

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