I recently had a discussion with a small business veteran who has bought and sold over 20 of his own small businesses in just about every industry imaginable. He had found a business he wanted to buy and we were discussing the financials and operations of the business. Upon further review into the nuts and bolts of the business in question, I mentioned that this particular business we were discussing appeared to be a bit too "hands on” for someone like him, and that I would imagine he was looking more for an "absentee owner" business.
His exact reply was, "The true absentee owner business is a myth. No matter what business you buy, there will always be some level of owner involvement." So I asked him, "Well, can't you just hire a manager to run the day to day operations then?" He replied, in summation, that as small businesses hire, to the point where no owner involvement is required, the profits accordingly disappear. He said it may not happen overnight, but the combination of additional overhead, and diminishing supervision, leads to loss of profits. This was a bit disheartening, almost like hearing that there really was no Easter Bunny, but after all, it was just one man's opinion, regardless of his extensive experience.
I would like to know from other BizBen Users and Contributors: What business types or situations do you feel are more likely to succeed in true absentee owner form?, Which business types are less likely? Please comment on this page, I would love to hear your feelings on this topic. Thanks.