How wonderful it would be to buy a business, hire a top notch manager who will oversee the operations while you sit on the beach and relax. This is the vision some people have in mind when buying a business and specifically those who are interested in purchasing an “absentee business.” Now comes the reality: you can’t start off that way; you have to evolve into it.
The first problem is that you cannot possibly hire the right manager until you know exactly what that job entails. To do so, you have to do the work. In other words, you have to
get a clear handle on the operations and all of the various moving parts inherent in any business
. Once you do so, then, and only then, can you consider stepping back and letting others run it. Obviously, the business has to be able to afford it.
The concept of an absentee run business is very attractive, but there are very few types of businesses that can meet those criteria immediately after you purchase it. For example, a coin laundry can be operated relatively hands off (as long as it’s all automated payments). That’s another point, if you want to run a business that deals in cash with a hands-off approach, get ready for your employees to have a hands-on approach to your cash.
The good news however is that if you’re able to successfully structure a profitable hands-off business, or even one where you aren’t devoting full-time to it, these are incredibly attractive to prospective buyers down the road because so few exist.
Perhaps I’m a bit neurotic and to a certain degree a micro-manager although I get better with every business I purchase, however; I have found that the best strategy to implement – which I’ve done successfully on many occasions, is as follows:
Purchase a solid business.
2. Operate it for at least one year.
Learn the real guts of the business.
Hire a manager to work under you for at least six months.
5. Train them to work from a detailed business plan.
6. Start to relinquish duties to them.
7. Set a goal to have them as the boss by the end of year 2.
Once they’ve proven themselves allow them the necessary control to run the business.
9. Make sure all employees know they’re the boss.
10. Set up milestones for them to achieve and a mechanism for you to be kept informed.
That’s the plan. Most importantly is to have a plan and to not think you can simply acquire a business and leave it to others to run successfully.