When we think of inheritance, we typically imagine things like cash gifts, property, or family heirlooms, but all sorts of other things can be included in a will, including businesses.
Now, while you might imagine a business would be the last thing you’d be getting when someone close to you passes away, you might be surprised – the UK was home to 5.6 million businesses in 2021, after all, so it’s not outside of the realms of possibility.
Whether you were expecting it or not, inheriting a business can put extra responsibilities on you and leave you wondering where to turn for help. To make sure you’re in the know should you inherit one, here are four crucial things to bear in mind.
Enlist help
Whether it’s a business mentor, partner, or reaching out to the rest of the family, getting the right help can allow you to properly navigate the work that comes with inheriting a business.
Your first port of call should be the estate lawyers your family is using to administer probate and inheritance issues. They will be able to ensure that, legally, you own the property. From there, a financial advisor is crucial in helping you get to terms with the state of the business.
Review documents
Before making any decisions on whether you keep, sell, or close the business, it’s important you get a good footing on where the business stands.
Are tax and employee payments up to date? What business and personal insurance is in place? What’s the current balance sheet and budget? What is the business plan and is it up to the task? And does the company have debts set against it?
Armed with this information, you can make properly informed decisions on the future of the firm.
Communicate
Letting those who work for, or have stakes in, the business know what’s going on can help them have a sense of security and reduce the risk of miscommunication or panic that could harm the business. This is particularly important when it comes to customers and suppliers – if you don’t properly communicate, they may believe the business is about to close and go elsewhere.
Know your options
Just because you’ve inherited the business, doesn’t mean you must take over it yourself. Reading up and researching the paths you could take can help you know you’re making the right choice.
According to Nerdwallet, the owner’s succession plan is a great place to start, if they have provided one. This should provide instructions on what the new owner needs to do to run the business – instructions you could just as easily provide to someone in your employ to run the business on your behalf.
Would you keep a business if you inherited it? Let us know your thoughts in the comments section below.
