There’s a secret among franchises, and that secret is that franchises simply don’t work with an absentee business owner. In fact, most franchise companies won’t let you own one of their locations if you plan on becoming an absentee business owner. But did you know that almost no business can succeed with an absentee owner? Let’s find out why.
What is an Absentee Business Owner?
Absentee business owners aren’t involved in the day-to-day operations of a business. They might not even live in the same city where their businesses are located. They are, for all intents and purposes, absent from the running of the business.
Note that “absentee business ownership” does not necessarily equate to “passive income,” which can be generated by running a mobile business.
An Absentee Business Owner Leads to a Who Cares? Mentality
Generally speaking, an absentee business owner leads to an overall “who cares?” mentality among workers and even managers. If the owner doesn’t care enough to be involved in the business, why should the employees care?
When a business owner is absentee, the employees also get the sense that they’re working just to make someone else wealthy. They can’t get involved in a bigger mission or an effort that is meaningful to them. They see that the owner doesn’t care, so they don’t care.
Who’s Minding the Henhouse?
Absentee business owners tend to lend themselves to stealing, bad business practices, and other unsavory results, simply because nobody is minding the henhouse. If you’re not watching over the business and holding your team to high standards, you can’t expect your employees to care much about customer service or anything else.
Good hiring practices can minimize a lot of these problems, but they can rarely eliminate them. Someone has to be captain on deck, watching over the ship, and making sure it doesn’t go down.
An Absentee Business Owner Will Never Really Know What’s Going On
What happens if a manager quits? An absentee business owner would be unlikely to be able to step in and take over until a new manager is hired. Further, the numbers don’t always tell the whole tale of how a business is doing. If all you’re doing is cashing checks every month, you may not be aware of a manager who is learning everything he or she can to open a competing business, taking your employees and vendors with him or her.
The Myth and the Reality of Absentee Business Ownership
The myth of absentee business ownership is that it’s a completely hands-off ownership style. But “hands-off” doesn’t work, at least not if you want your business to continue to grow and be successful. And a modified approach is challenging, as well. In many cases, someone has worked for years to build a business. When they’re ready to retire, they want to gradually turn the business over to a son or daughter or a longtime manager.
The reality is that those gradual transitions rarely work smoothly and require a great deal of effort to keep on-track. It’s often better to just sell a business outright, if you don’t want to continue running it (or to avoid getting into it, if you plan on being an absentee owner).
Absentee business ownership is great as a dream, but in the real world, is rarely effective. Plan to be involved in your business…and plan to do something you enjoy.