Is The True 100% Absentee Owner Business A Myth?

Comments & Replies: 3     Views: 7222     Posted By: Business Broker  

Is buying a truly absentee run business really viable? I take a look at this concept with others on BizBen and explore how this can be done. What size businesses, what types of small businesses can be truly run absentee without the owner milling about running a venture? I give my views.

Topics: Buying A Business     Tags: absentee run, buying a business, for sale by owner


Contributor: Business Broker, SF Bay Area

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.


I couldn't agree more.

Often I encounter potential buyers who are looking for a "cash cow" with little or no effort on their part to invest time into the business. -- The proper investment for them is the stock market (or, maybe, very passive real estate), not a small business.

Never have I seen a truly "absentee ownership" operation in the small business marketplace. While one may find a "4-hour work week" SEMI-absentee business, even those require more time and talent from a new owner than is often apparent to the prospective buyer.

So, Mr./Ms. Buyer, when you see "absentee ownership" in an ad, be wary and be skeptical.... and do extensive detailed due diligence inspections. You might find a rare gem, but you are most likely to find a lead sinker.


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Elizabeth McGovern: Escrow Services - San Francisco Bay Area

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Timothy Cunha JD, Business Broker: SF Bay Area

SF Bay Area experienced attorney, & business broker. I & my EvergreenGold team offer owners sound advice & expertise to build business value & achieve profitable sales. For a FREE business evaluation & SWOT analysis for your business call me direct at 650-600-3751, 650-866-5393 Text.

Matt Weiler, Business Broker: Gas Station Specialist

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William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

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Helen Yoo, New Century Escrow - Escrow Services In Southern California

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