How a Willable Business Can Benefit Everyone Involved A business is a significant legacy -- perhaps the best one you could leave behind.
By JR Ridinger Edited by Amanda Breen
Opinions expressed by Entrepreneur contributors are their own.
When most people think of inheritance, they think of acquiring a sum of money — or maybe an asset, like a house or valuable heirloom. But can you inherit a business? Would that be better than traditional cash, real estate and the like?
The reality is, you can inherit a business or will your company to someone else, and it's a significant legacy — perhaps the best one you could leave.
Related: Inherited an IRA? You Could Pay Major Taxes If You Don't Follow the New Rules
Willable businesses are an intelligent choice
Willing a business is a smart idea because, assuming it's run properly, it will continue generating income. That continued cash flow means that you'll likely be more stable over the long term. You won't have to keep developing new ways to get cash, which is an important factor for planning and flexibility throughout your life.
Secondly, a well-operated, healthy business doesn't just keep providing the same amount of money. Ideally, it grows over time, so the amount of income you have increases. This will provide even more opportunities for wealth and stability. You might establish a partnership that would open up sales you wouldn't have been able to achieve on your own, for example. Other options simply don't sustain or expand this way.
Finally, other traditional backup plans tend to come with inherent risks. A 401(k), for instance, is tied to the success of the stock market — so if those stocks tank, so does the 401(k). And in times of economic uncertainty, these normal avenues for success can become dead ends.
Some reasonable cautions
Even when a business is run well, it's not immune to the fluctuations of the market. If things change quickly, then you have to be able to respond and adapt to keep the business relevant. Many companies have been relegated to the dustbin of history over the past few years because they didn't have enough foresight to see changes coming or just because they got hit with a combination of unlucky factors and didn't pivot accordingly.
It's possible you inherit a business that's not in the greatest of shape. Maybe it has an antiquated business model or really high overhead, for example. A business like this is probably more of a headache or an albatross that weighs you down.
Therefore, it's important to give or receive a business with the realization that it probably has its imperfections. There might be a lot to consider and some tough choices to make. But, if you're willing to work and you stay on top of your market, you can likely manage those uncertainties and get a great result.
Stability and empowerment can become attainable
Inheriting a business doesn't automatically release you from having to put in genuine thought or effort. Like any investment, it has some risks — but it typically offers fantastic potential for continued or even increased income. Plus, it's not necessarily going to break in the wind the way other options can. In an ever-changing landscape, we could all use that stronger footing. This isn't just about being economically stable. It's also about the empowerment and mental security you get from not having to worry about money in the first place.
Related: Traditional Career Planning Is Dead. Here's the New Path to Financial Security.
When you're considering your legacy, break out of the mold a little. More small businesses are getting off the ground than ever before, and in particular, ecommerce businesses appear to have an especially bright future. Now is the perfect time to take the freedom that using a business as an inheritance can offer — because nobody deserves unpredictability or second best.
