How to be an Absentee Business Owner
A participant in one of our business seminars surprised me when she said that she wanted to put up a business even though she doesn’t have any passion for entrepreneurship. Her motivation is only to earn money.
What is surprising is that she is already a prominent doctor who earns far more than she can spend.
Naturally, I asked her why she wants to go through the hassles of putting up a business when she is already earning millions in her practice and she already loves what she is doing. Her answer is that whenever she stops working, she stops earning. It was not possible for her to take a long vacation without seriously affecting her practice. And so, she wants to start a business that will earn even without her presence.
Many of us are like the doctor mentioned. We want to start a business but only on a part time basis, at least, initially.
The question is: Can a business run profitably even if the owner is not there full time? Those of us who are currently employed may not want to give up their jobs, while independent professionals like doctors, may not consider abandoning their vocation.
It is possible to have a profitable venture even with a limited time commitment but there are several caveats that an absentee entrepreneur must consider:
• Keep in mind that a business is not a passive investment. You cannot just put your money into a business and forget about it until you check its status again after one year, like the usual time deposit. Note that being an absentee business owner is just a relative term, you cannot be totally absent. It just means that you will be retaining your current job. Therefore, be prepared to allot sufficient time to nurture the business.
• Do not start a business that needs your continuous presence to operate. For example, a trading business where there are many large transactions may be hard to delegate. Look for a simple business that is easy to check on and where there are few chances of a disaster even if you are not there.
• The business model should have good margins and profitability. Enterprises with borderline feasibility are poor candidates for an absentee owner. A sufficient allowance must be included into your financial projections to compensate for the fact that you are not on site to infuse immediate care to the needs of your business.
• There must be a system of checks and balances. It is not enough to get someone you trust; there must also be a way to minimize the temptation not only to commit theft but also to sustain a good work performance. To accomplish this, have a reliable accounting and control system.
• Utilize modern technology to improve your control. Have a point of sale system if you are into retailing. This will not only deter theft but also improve your purchasing. Install CCTV’s that are connected to the internet so that you can check what is going on even if you are far away.
• There must be written rules and procedures for the accomplishment of tasks and contingencies. Since you will rarely be there to make decisions, it is impractical to have them contact you every fifteen minutes! There must be someone in charge and you should learn how to delegate properly.
• Get a franchise. If you feel that setting up a business from scratch is too overwhelming, you can just get a franchise. Statistics show that the success rate of the established franchises is very high when compared to the independent start up. The main problem in getting a franchise is the exorbitant cost; the best franchises are the most expensive. Also, while the franchisor takes care of many problems you still must invest time and effort in finding the best location.
Not everyone wants to be a full time entrepreneur. There are those who are already happy with their current job or profession and just want another source of income. You can have the best of both worlds by being an absentee business owner.
*Originally published by the Manila Bulletin. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.
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