Inherited my Dad's Business

[Cohesion]

Hi BL.

My father recently passed away. It's been about 3 weeks.

The next step in settling his estate is to run the numbers and find out if his business of 16 years was making any money. According to Dad, he was "just breaking even". He had nothing to back up this claim, however, as he hasn't done Federal taxes since 2004 (there are fines)... and Quickbooks wasn't even installed on his computer anymore. I have yet to run expenses against deposits. Projected worth of sellable assets is 75,000-100,000.

Business is running as usual - there are 1 and a half employees who are there 6 days a week from 7:30-5. I live 45 minutes away; my brother is 4 hours away. After numbers are in place, there are a few possibilities...

a) Sell the business to a stranger
b) Sell the business to my Dad's brother at a discounted price
c) Liquidate the inventory (hopefully not this!)
d) Keep the business running (Likely most profitable choice)

My brother wants to do a) or b) -- by a long shot. He said he would be happy with even 50% of its worth -- just to wash his hands of it. (The business feels messy to think about because of the past lack of bookkeeping and our history with the place.)

The way I see it: If the numbers show that the business is breaking even (potentially lucrative) - I will be happy to run it. My uncle (currently 1000 miles away) has mentioned buying the place himself and moving here. If I decide I'd like to keep the business, I'm going to have to be prepared to challenge my uncle and my brother in a serious way.

My struggle is my Ego?

I worry about my family's confidence in me to do well with it. In the past I've given my Dad some stellar advice, as well as some that was questionable. My confidence is still suffering some and I'm not sure how boldly I could disagree with my brother or uncle about what needs to be done. In sum, they are bigger, sharper, and stronger than me. I don't know if I want to challenge them – especially my brother who has done so much for me.

I have personal interest other than money for wanting to take it up.

-I am currently waiting tables and on SSDI. The alternative is to work a low hourly wage at fixed hours for someone else... while I “finish” school.

-Now that I'm drug-free, taking on a high-profile position would do a lot to expedite my goal of gaining family's respect back.

-My daughter is 3; flexible hours and being my own boss will be extremely helpful at this point.

Thoughts?

 

[Cyc]

First of all, I'm very sorry to hear about your father. My condolences.

I think it's in your best interest to have a meeting with the employees and get their take on things. Right now they are the ones keeping the business alive. You might want to even consider promoting one of them to get their advice and support of how to move your company forward. It looks like you'll need allies here.

Overall, I think you should at least try. If, in a year from now it's too much of a headache you still have the option to sell or liquidate and then you'll be all the wiser moving forward with a decision. Look at the next few months as an investment decision, learning exactly what the business is worth. Right now it would be foolish to hand off the reigns before knowing exactly what you could be giving up.

Just my advice. Best of luck.

 

[Arnold]

Consider the time your dad had to put in it to break even.
If it was loads of hours, which can come at a cost of not having family time, then sometimes it isn't worth it.
It's all very nice doing your own hours and being your own boss but when bills need paying and you're ready to lynch the last customer who hasn't paid his bill for the last two months then it ain't all that good!
When times get tough with a recession etc...and you have to support your family...

It's all dependable on what you do, effort required and how much you get paid. It's a broad term 'business'.
Unless you have a mortage paid off then things change a little bit.
Etc...

Personally I've had enough off being my own boss for the last twelve years. (5am and I'm still at work)

 

[jazz hands]

It all depends on what you figure out once you piece together the financial position. I wouldn't make too specific of plans until you know what exactly you have on your hands.

 

[Hybris]

Take a long hard look at the profitability and current competition in the area. Was your father sticking with this because it was all he knew, or because there is some serious potential? Also is it something you're knowledgeable in? I support the suggestion Cyc made to promote someone currently employed to temporarily or maybe even permanently run things. They do afterall currently have the most knowledge and experience with the business now that your father has passed.

As far as the family members problem goes. I would ask yourself a major question first.. are you looking for an easy way out of school/job searching or is your heart genuinely in this business? If the answer is the latter then sit down with your family members and be honest. When it comes to a deceased' assests, family sometimes goes out the door and things get messy. I truly hope this doesn't happen to you but if it does, its all about dollar signs. Offer your brother and uncle a buyout if they are entitled to a portion of the company. Seek some financial advice from a 3rd party and chances are they will jump at the opportunity for some fast cash. Be sure to have legal counsel and documentation so they can't come after you if you start turning big profits.

I wish you the best of luck, this is the some of hardest stuff to deal with when you lose a family member aside from the loss itself. If you and your father were close and like-minded, imagine what he would do or want you to do in this scenario. Hopefully that will give you some guidance.