Of all the things you could inherit from a family member, a business is likely the most complex. It’s rarely something that you can just leave on the side until you’re ready to deal with it – businesses are almost like living organisms, and need to be cared for to ensure their survival.
If you find yourself in this kind of position, it’s imperative that you understand the various options facing you. From taking over direct, operational control to liquidation or restructuring, here are a few of your main options.
Take Over Personal Control
The most engaging option you’ll be faced with is to assume an active leadership role in the business you’ve just inherited. This means taking not just formal ownership, but also a range of day-to-day operational responsibilities.
If you’re seriously considering this, you’ll need to be honest about how prepared you are to take over these kinds of responsibilities. You’ll need to brush up on industry knowledge and a range of management skills, and even then, it could mean biting off more than you can chew.
Appointing Professional Management
If you want to keep the business, but can’t or don’t want to run it yourself, then you can also think about appointing professional management. You could hire an external CEO, or promote someone who is already at the company with existing expertise.
If you can do this well, then you get the best of both worlds. You can continue to benefit from your financial interests in the company, without having to take on all of the stress associated with its day-to-day management.
Selling The Business
In some cases, it’s just best to sell the business. If you’re not able to run it yourself, or you just don’t want to have to take on the stress of such a volatile asset, then selling with the help of a business broker can allow you to liquidate your financial interests as smoothly as possible.
It’s important to navigate the sale process properly, starting with an accredited business valuation. A poorly managed sale can be a disaster, leading to extensive loss of value.
Bring In A Trusted Family Member Or Partner
Another option to consider is bringing someone else on board to help you shoulder the responsibility – particularly if that person has a vested interest in the business or a background in its operations. This could be a sibling, cousin, or even a long-time employee who feels like part of the family. You may find that the person you trust most is already closely tied to the business, making them an ideal partner in navigating the transition.
Sharing ownership or responsibilities doesn’t have to mean giving up control. You can set clear terms around who does what and how decisions are made, whether that’s through a formal partnership agreement or structured leadership roles. This setup can offer you both practical and emotional support during what might be a difficult time, especially if the inheritance followed a recent loss.
Preserving The Legacy Without Running It
Not every business heir wants to take on a leadership role, and that’s okay. If the business has cultural, historic, or sentimental value – but you’re not interested in running it or making major changes – you might look into ways of preserving the legacy while stepping back from daily operations.
This could mean turning the business into a trust or foundation, or maintaining partial ownership while delegating leadership to others. In some cases, families choose to retain branding rights or equity shares, even if they’re no longer involved in the decision-making side of things. That way, the family name and history stay attached to the business, even as others manage its growth.
Converting The Business Into A New Venture
If the current version of the business doesn’t make sense for today’s market – or for you personally – but you still want to keep some part of it alive, consider pivoting. Maybe you’ve inherited a physical retail store, but the demand has shifted online. Or perhaps the product line is outdated, but the brand has recognition that could be leveraged.
Turning the inherited business into a new venture allows you to honour its past while moving it into the future. You might keep the customer base or the location but change the model, or use the existing assets to launch something more aligned with your own interests and skills. This path involves more creativity and risk, but it can also be incredibly rewarding if you’re up for the challenge.
More Drastic Options
If the business in its current form is not financially viable, then you may need to choose a slightly more drastic option. That could be some kind of restructuring if the business is somewhat salvageable, or liquidation if the liabilities outweigh the value of its assets.
If you restructure, you could do something like jettison the parts of the business that are the biggest financial burden. If you liquidate, then you would need to wind the business down, liquidate the assets, and distribute the proceeds to creditors.
Don’t Rush The Decision
It’s also worth remembering that you don’t need to make a final decision overnight. Depending on the structure of the business and its financial situation, you may be able to appoint interim management, pause certain operations, or seek legal protection while you figure out the best path forward. Taking time – within reason – to assess your own goals and consult professionals can prevent rushed decisions that you might regret down the line.
Inheriting a business is a huge responsibility, but it also opens the door to new possibilities. Whether you choose to take the reins, step aside, or shape something new from what you’ve been given, it’s your decision to make – and there’s no single right answer.
No matter which option you choose, it’s important that you fully understand their respective risks and rewards. By engaging experienced advisors early on in the process, you can make sure that you make your decision based on the best information available to you, safeguarding your business and personal interests.
Thanks for stopping by!
Magda
xoxo