What Do Absentee-Owner Businesses and Unicorns Have in Common?
We often hear from people who are interested in finding a business that won’t take much of their time – one that’s cheap to buy and provides a good return.
Something they can run as a sideline to their full-time job. The car wash is a common conception of the absentee-owner business.
It looks like a business you can set and forget. Just let it run and collect the money.
Well, finding that kind of business is about as likely as finding a unicorn walking down the street.
If we knew of one, we’d have already bought it ourselves, and we’d be the ones galloping off toward that imaginary rainbow!
If you do find a business that doesn’t require the owner’s constant attention – and we do sell those – it’s likely to be a longstanding business, which the owner has built over time.
He has managers and employees he knows and trusts, and he can look at the financial statements and easily identify and address trends before they become problems.
As a new owner, you wouldn’t automatically inherit the ease he enjoys.
To improve the odds of success, new owners should plan to spend a good portion of every week in the business. You need to learn your industry, your store or operation, your employees and your financials. You will want to build relationships with your customers.
How will you know if your car wash machinery is working right, your property is being maintained and your manager is depositing all the day’s quarters each night? It takes some footwork and close attention to look after all the details of the business.
We had a client who bought a few coin-operated car washes several years ago while holding down a full-time job. It wasn’t long before he learned his managers were stealing from him and failing to maintain the equipment. He quit his job to rescue the businesses but ended up selling the car washes eventually.
Don’t get us wrong; car washes can be great businesses. We have another client who is doing very well with car washes. He has taken some time to build them up and put strong managers in place. If they’re located in high-traffic areas, maintained properly and managed with integrity, car washes can return a solid return year after year.
So is the dream of an absentee-owner business possible? With several years’ investment, you may be able to achieve it. Otherwise, you’re better off leaving the unicorn on the storybook page.
If you or someone you know is interested in buying or selling a business, please call us at 913-383-2671 or contact one of our Apex Business Advisors today!
