The Magical Myth of the Absentee Owner

“So, we’re a married couple that would like to keep our jobs, and we’re looking for an absentee business that can add another $50,000 a year to our income.” We’d love to say this is some fictional scenario but almost every broker in the office gets one of those calls at least once a month. For some reason, there’s a segment of the population that sees a business like a washing machine that you can program and leave and just periodically show up at for a check. Even better than that, in fact, because you still have to dry and fold your own laundry.

Yes, such absentee businesses exist, and yes, it’s possible for a business owner, in time, to create an absentee business, but having it seamlessly function that way from day one is an expectation that potential business owners should flush from their minds.

What Do You Want?

After we get the query we alluded to above and take a bit of time to hear out the potential client, we are generally going to follow up with, “What are you looking to get out of this?”

“Some extra income.”

Such an answer indicates a perspective that considers $50,000 a year of income as chump change compared to high-powered corporate jobs, so simply keeping that business going will be pretty easy, right?

But this is the perspective of an employee, not a business owner.

An employee thinks that he/she can show up somewhere for a certain number of hours and get a paycheck regardless of what happens to the business.

Business owners know that sometimes they can work 80 hours a week and still not get paid at the end of the month.

A business that can generate a respectable $50,000 of income a year requires a commitment of time and money and should not be thought of as a “part-time job.” We’ve seen relationships fall apart and marriages get tested because people bought businesses thinking they were simply part-time projects that could be done outside of working hours. 

That’s simply not reality.

One Shortcut: Industry Knowledge

While we still maintain that you can’t seamlessly take over an existing absentee business, one way that this would be even remotely possible is if you have deep industry knowledge.

For example if you want to buy a printing business and have previously owned a print shop or have worked in the printing industry for many years, you’re probably not going to have to spend a lot of time learning the lingo of the business, or finding out how the machines run, or considering who the best and most reliable suppliers are.

But, you’re still going to face the same challenge that all new owners face: meeting the employees, making them comfortable, and retaining them long term.

That’s not something you can do on the nights and weekends, not something you can do “absentee.”

It will take time, and only after that time has passed, at least 6-12 months, you might be able to transition the business into an absentee one.

Final Thoughts

There’s nothing wrong with aspiring to own an absentee business. We’ve bought and sold many in our time. But it’s wrong to think you can run a business as an absentee from day one as a new owner.

What makes more sense is sharing with the seller that this is a goal you are shooting for so that you can find out what steps and what timeline would be necessary to make that happen…from someone who would know.

If you’re looking for an absentee business so you can be an absentee right away, we can’t help you. But if you’re interested in putting in the work to make a business an absentee one in the future, give us a call.