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What is absentee business ownership?
Absentee business ownership refers to a business model where the owner is not involved in the day-to-day operations and instead relies on a management team or automated systems to run the business. The owner focuses on oversight and high-level decisions.
What is absentee ownership in business?
What types of businesses are best for absentee ownership?
Businesses with low operational complexity and consistent cash flow work best. Examples include laundromats, vending machine routes, car washes, franchises, self-storage facilities, SaaS businesses, content websites, and e-commerce stores with third-party fulfillment.
I am looking at purchasing a small business for the first time, and see a decent amount of business listings touting absentee or semi-absentee ownership. Example, a pizzeria with an asking price of $2.4m doing $3.9m gross with SDE of $850K is advertised as completely absentee. If an owner can make an insane SDE of $850K without being involved in the daily operations of the business....why on earth would they sell it? What am I missing? This specific business is out of my price league, but there are many others in my area all over the pricing spectrum that are listed as absentee. Tell me your experiences and what this actually means. Tell me your nightmare stories of having your manager quit and you don't know how to run the business. Any help greatly appreciated!