Comments on: How to manage an inherited business http://smallbusiness.blogs.cnnmoney.cnn.com/2009/03/03/how-to-manage-an-inherited-business/ Editors from FSB magazine answer your pressing small-business questions. Tue, 15 Dec 2009 12:52:55 +0000 http://wordpress.com/ hourly 1 By: Vivek L, White Plains, NY http://smallbusiness.blogs.cnnmoney.cnn.com/2009/03/03/how-to-manage-an-inherited-business/#comment-1586 Vivek L, White Plains, NY Fri, 06 Mar 2009 02:30:37 +0000 http://askfsb.blogs.fsb.cnn.com/?p=941#comment-1586 Hi there, Sorry about your loss. The business you have inherited sounds like it has enjoyed a good reputation and cash flow but I would take nothing for granted in this economy. While this excellent forum will yield you many suggestions for managing your business, I am going to recommend that you get your arms around the cash flow of the company before you do anything else. Cash flow shortfalls cans put a small business out of business in days. Also take some time to understand your personal credit scores, business credit and make sure you have a back up line of credit to help you ride out these tough times. Like this forum, our website had some excellent free resources for small business owners and I hope you take advantage of them. Vivek L http://www.smallbusinessplanresources.com En Espanol http://www.smallbusinessplanresources.com/spanish Hi there,

Sorry about your loss. The business you have inherited sounds like it has enjoyed a good reputation and cash flow but I would take nothing for granted in this economy. While this excellent forum will yield you many suggestions for managing your business, I am going to recommend that you get your arms around the cash flow of the company before you do anything else.

Cash flow shortfalls cans put a small business out of business in days. Also take some time to understand your personal credit scores, business credit and make sure you have a back up line of credit to help you ride out these tough times.

Like this forum, our website had some excellent free resources for small business owners and I hope you take advantage of them.

Vivek L
http://www.smallbusinessplanresources.com
En Espanol
http://www.smallbusinessplanresources.com/spanish

]]> By: Harry Bhatia, Valley View Ohio http://smallbusiness.blogs.cnnmoney.cnn.com/2009/03/03/how-to-manage-an-inherited-business/#comment-1585 Harry Bhatia, Valley View Ohio Fri, 06 Mar 2009 01:45:25 +0000 http://askfsb.blogs.fsb.cnn.com/?p=941#comment-1585 Ann, Sorry to read about your loss. I run a similar company in Valley View, Ohio. Let me know if you want to compare notes. Suggested title: The E Myth By Michael E. Gerber Ann,

Sorry to read about your loss. I run a similar company in Valley View, Ohio. Let me know if you want to compare notes. Suggested title: The E Myth By Michael E. Gerber

]]> By: Thomas Deans, Toronto, Ontario http://smallbusiness.blogs.cnnmoney.cnn.com/2009/03/03/how-to-manage-an-inherited-business/#comment-1582 Thomas Deans, Toronto, Ontario Wed, 04 Mar 2009 02:24:42 +0000 http://askfsb.blogs.fsb.cnn.com/?p=941#comment-1582 Sorry to hear about your loss Ann. My recomendation is first to up-date your own Will and Shareholder Agreements and make sure that if god forbid something happens to you that you don't leave the people you love in the difficult position to deal with your business assets. So I recommend that you close your eyes and ask yourself the following questions: if I were to become incapacitated or die who whould own the business -- are they prepared to lead the company, have I had the conversation with the intended recipient(s) that it would be okay to sell the business, is there enough insurance in place to cover the estate taxes on my death? There is no delicate way of saying that had your husband put in place a buy-sell agreement with a key employee or group of employees, or a buy-sell agreement with a competitor on his death the business would have automatically been sold using a pre-determined valuation formula and the proceeds could have flowed to you instead of an operating business that requires knowledge and skill to lead. This is not to suggest that you won't be successful but the odds are stacked against you. Keeping the confidence of key employees will be job one -- any hint that you are in over your head will send the talent running to the exit. If you can motivate the key employees then roll them into your meetings with your top customers --this will instill confidence all the way around. But the real challenge is for you to understand that it is okay to sell the business. Selling is not failure but a key option for protecting wealth. Using the sale proceeds to fund a business in your area of expertise --nursing-- would be a tremendous way of honouring your late husband's legacy. Businesses are merely instruments of wealth creation, they are not heirlooms and always have a begining middle and end. It is always hard to sell a gift but I encourage you to expand your definition of legacy and follow your own authentic business dreams. Thomas Deans Ph.D. Author of, Every Family's Business www.ProtectingFamilyBusinessWealth.com Sorry to hear about your loss Ann. My recomendation is first to up-date your own Will and Shareholder Agreements and make sure that if god forbid something happens to you that you don't leave the people you love in the difficult position to deal with your business assets.

So I recommend that you close your eyes and ask yourself the following questions: if I were to become incapacitated or die who whould own the business — are they prepared to lead the company, have I had the conversation with the intended recipient(s) that it would be okay to sell the business, is there enough insurance in place to cover the estate taxes on my death?

There is no delicate way of saying that had your husband put in place a buy-sell agreement with a key employee or group of employees, or a buy-sell agreement with a competitor on his death the business would have automatically been sold using a pre-determined valuation formula and the proceeds could have flowed to you instead of an operating business that requires knowledge and skill to lead.

This is not to suggest that you won't be successful but the odds are stacked against you. Keeping the confidence of key employees will be job one — any hint that you are in over your head will send the talent running to the exit. If you can motivate the key employees then roll them into your meetings with your top customers –this will instill confidence all the way around.

But the real challenge is for you to understand that it is okay to sell the business. Selling is not failure but a key option for protecting wealth. Using the sale proceeds to fund a business in your area of expertise –nursing– would be a tremendous way of honouring your late husband's legacy. Businesses are merely instruments of wealth creation, they are not heirlooms and always have a begining middle and end. It is always hard to sell a gift but I encourage you to expand your definition of legacy and follow your own authentic business dreams.

Thomas Deans Ph.D.
Author of, Every Family's Business
http://www.ProtectingFamilyBusinessWealth.com

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