Boss is dying and wants us to take over business?

Taking the Reins: A Sudden Shift in Business Ownership

Introduction

Life can be unpredictable, and for a small business, sudden changes can lead to both opportunities and challenges. Recently, my partner and I found ourselves in a surprising and daunting situation—our boss, who has been a critical part of a small private instruction business, is in hospice care and wishes for us to take over operations. With no formal legal agreements in place and only verbal contracts, we now face the task of transitioning ownership. Here’s our journey navigating these uncharted waters.

A Little Background

For the past few months, my partner and I have been working diligently under our boss’s guidance, preparing to eventually take the reins of this established business. Operating out of a garage converted into a specialized studio, our venture has provided valuable instruction services for about five years and has just begun to turn a profit. While we have developed a solid relationship with our clients and possess the relevant operational access, we are utterly unprepared for this unexpected leap.

A Lack of Formal Training

Neither my partner nor I have an MBA or any previous experience owning a business. The absence of formal agreements complicates matters even more. Although we are known to our clients and have been given access to the necessary tools and information, we find ourselves at a loss for what steps to take moving forward. With our boss’s declining health and the presence of her elderly family members—who are not involved in the business—we are facing the reality of needing to act quickly but thoughtfully.

Navigating the Legal Maze

The confusion around what legalities we need to address feels overwhelming. From transferring ownership to understanding tax obligations, we’re unsure where to even begin. We know the business is legitimate and has its license in order, but the absence of financial records raises alarms. Without a CPA or accountant on retainer, delving into financial matters and tax implications is a mystery we need to unravel.

Next Steps and Considerations

As we move forward, here are some steps we plan to take:

1. Consult with Professionals: Seeking legal advice and financial guidance is essential. An attorney can help us understand the necessary steps for transferring ownership, while an accountant can clarify tax obligations and assist with bookkeeping.

2. Document Everything: While our previous agreements were verbal, we must start documenting our roles and responsibilities formally. This can help establish a clearer understanding of the business structure moving forward.

3. Communication with Family: We need to reach out to our boss’s family to discuss the transition and any additional insights they may have. Their involvement may also provide clarity on the next steps.

4. Client Communication: Keeping our clients informed about the transition will help maintain trust and stability in the business. We may need to reassure them of our commitment and capacity to continue providing quality instruction.

5. Financial Overview: Gathering information about the current financial state of the business, including expenses, income, and any accounting processes, will be crucial for our planning.

Conclusion

While we find ourselves in a daunting situation, we are determined to navigate this transition responsibly and successfully. Taking over a business is no small feat, especially under these circumstances, but with the right knowledge and support, we believe we can uphold the legacy our boss has built and lead the business into the future. We appreciate your support and any insights you may have as we embark on this journey. Stay tuned for updates!