Maintaining Control as an Absentee Owner

By Aaron Muller
June 2007

One of the greatest fears people have when it comes to becoming absentee business owners is losing control of their business. What if your employees don’t run your business right after you leave? What if your customers stop coming? What if you don’t know what is going on with your business any more? Let’s address these concerns one by one, so you can see how absentee owners still maintain control of their business, although in a different way than owner operators do.

Concern #1: Your employees won’t run your business right.

Your employees will only run your business to the ground if you don’t set up systems and procedures, and if you don’t monitor your business on a regular basis. In our consulting program, we help business owners create systems, policies, and procedures for their employees. Your job is to find people that will conform to your rules. If you keep an eye on your business, you will find out one way or the other if your employees start to break your rules. What’s more, we teach you how to monitor your company financials on a weekly basis. If something goes wrong, you are on it right away.
“Being an absentee owner is a proactive process.”

Being an absentee owner doesn’t mean you just take off and never worry about your business again. Being an absentee owner is a proactive process. Every week, you are spending 5 hours checking over everything, and making sure that the numbers on the financial reports are within the range of what they are supposed to be. If everything seems to be running fine, you trust that your employees are doing a good job. If something is wrong (let’s say sales are dropping consistently), you should immediately resume control and be on everyone’s back on a daily basis. Why are sales dropping? What’s wrong? Talk with the manager on a daily basis until things improve. Work there everyday if you have to, so you can fix whatever the problem is.

Our philosophy is that if things are running fine, you are easy and you let things go. You trust that your employees are following the rules and procedures you’ve set up, and you keep an eye on your business by spending 5 hours a week. If the financial reports start to show danger signs, you are on everyone’s back immediately. You monitor things on a daily basis, and if you have to, work there everyday for a short period of time until things improve. This way, your employees know that you are monitoring the business even if you are not there everyday. If you happen to hear about some unacceptable behavior that was done by your employee, you are there right away having a talk with that employee.

Being an absentee owner doesn’t mean letting your employees have complete freedom to do whatever they want. Before you leave, you set up systems and procedures so they do things your way. After you leave, you continue to monitor things to make sure things are running fine. If something major is wrong, you are there right away to correct it until it is right again. If something minor is wrong, you have your manager deal with it, and adopt the attitude that not everyone can be as perfect as you would like them to be.

Concern #2: Your customers might stop coming.

Some business owners believe that customers come because they want to see the owner. If the owner is not there any more, the customers might stop coming. If this is the case for your business, it means you haven’t properly systemized your business. Why do customers like to see you? Is it because you are friendly? What is it that you do that makes the customers want to come? Write down these behaviors and train your employees on them. Sometimes, you might be surprised that customers come anyways even when you are not there. You might lose a few customers, but is the loss really enough to worry you? Perhaps the majority of your customers continue to come even when you are not there. You never want your customers to come just because they like your personality. You want them to come because your business consistently provides excellent customer service. If it is friendliness, you can train your employees on friendliness. If it’s the fact that you are diligent on your follow through, you can train your employees on it. Whatever it is that is causing your customers to come, you need to transfer that skill onto your employees.

Concern #3: You don’t know what’s going on with your business any more.

If this is one of your concerns, it means you have not learned how to read company financials. The numbers don’t lie. They tell you everything that is going on with your business. The ability to read the company financials not only allows you to see the current state of your business, it will give you an early warning sign to any potential problems in the near future. In other words, an absentee owner with the ability to read company financials can often know more about his or her business than an owner operator that does not know how to read financials.

When we say the ability to read company financials, we are referring to your ability to understand the profit and loss statement, the balance sheet, and the statement of cash flows. This ability is so important to your success as an absentee owner that we have dedicated an entire consulting manual teaching you step-by-step how to understand and analyze the numbers in your business. If you can acquire this ability, you will know a lot about your business without ever being there.

For more information on how you can become the absentee owner of a profitable business, check out our consulting program.