Why "Absentee Owner" Is the Wrong Goal for Restoration Owners

You can step out of daily operations without checking out. Here's what has to be in place before you do.

So you want to be an absentee owner. I get it.

I think a lot of business owners, regardless of the industry, could be restoration, could be general contracting, other home services, you name it. A lot of people start a restoration business or other businesses because they want freedom.

What type of freedom?

Time. Money. Maybe one is more important to them than the other. Maybe they're both equal. But some combination of freedom of time and money. They want to be able to earn more money than they could working for somebody else, and they want more freedom. Freedom to do other things.

For me, it was to start other businesses and also to be able to have a lifestyle that included a decision that my wife and I made very early on. We both wanted her to be able to be a stay-at-home mother.

And I didn't believe that working for someone would be able to give me the combination of freedom of time and money that I wanted, that we wanted for our family.

Very common, right?

Let me back up. The question is, to be or not to be an absentee owner. And I think that means different things to different people.

I don't love that term, "absentee owner." I'm all for getting owners out of daily operations as much as possible, methodically whittling away at that seemingly endless list of tasks down to a core small group of things that the owner is focused on. I'll talk about that in a minute.

But absentee, for me, equates to an owner who doesn't care, an owner who doesn't know what's going on. And that's not a good place to be.

Let me tell you a couple of quick stories.

One is my own.

In 2005, I started my restoration business. In 2009, I started my coaching business, The Growth League, specifically to help restoration business owners. In 2010, I started an auto glass business.

When I started the auto glass business, I was probably a year, maybe a year and a half into it, and my right-hand person in the restoration business came to me and said, "You know what? I've got to tell you, you're not paying attention to the restoration business anymore. You're 100% focused on the auto glass business, and it's not good."

I was so grateful that she had the courage to have that conversation with me. I don't think a lot of people would have. It was a great eye-opener for me. It was a great wake-up call.

The feeling with the team was that I didn't care about that business anymore. I don't know if they were conscious of it or aware of it, but my guess is that if they felt like I didn't care about the business, then they probably felt like I didn't care about them either.

Not something that I wanted, and not healthy for the business.

Another quick story.

I got a call from a GM in the industry who I've known for a long time. Not a client. They told me they had recently left their company.

I was really surprised because they were everything in the business. They were extremely involved. The owner was not.

So what happened?

This person told me, "I got tired of feeling like I was the only one who cared about the business, that I cared more about the business than the owner cared about the business."

Now, this person had 100% ownership mentality. They weren't looking for the owner to be involved in daily operations, to go out to problem jobs, or deal with employee issues. They wanted to know that the owner was engaged, knew what was going on, was engaged with them, and understood what was going well and not going well in the business from a financial standpoint.

The owner didn't know anything.

And it made this person think, "Well, if the owner doesn't care, why should I care?"

A similar thing happened to me.

Before I started my restoration business, I ran a business for an absentee owner who was very unengaged. I was really young, and I was running the business. I remember thinking to myself, "Man, I care more about this business than they do."

It wasn't a good feeling.

So those are a couple of cautionary stories about what absentee ownership means.

I am 100% for getting owners out of daily operations.

In my businesses, I was very uninvolved in daily operations. It happened over the course of years as I methodically chipped away at the things that I did in the business and held onto a small set of things that I just didn't want to let go of.

I want to tell you this short list of things that I think is really important as you step away from being so involved in the business and take on other interests.

Maybe you're just spending more time with your family.

Maybe you're traveling more.

Maybe you're starting another business or businesses.

What do I see as important?

The financials have to be great.

You've got to get the business set up to be able to do this.

One, your financials, and the process that drives the financials, have to be rock solid.

You've got to be able to depend on the profit and loss statements, both cash and accrual, as the truth.

It can't be, "I don't look at the P&Ls because I know they're not accurate."

In the world according to me, you can't walk away from the business, take on other things, be a responsible owner, and expect a great outcome if that isn't in place.

The second thing is I think you need to have a scorecard, and you need to have a weekly leadership meeting to go over that scorecard.

What do I mean by scorecard?

You pick a set of high-level metrics, maybe 10, no more than 12. There's flexibility, obviously. But it's this core group of metrics that will help you understand at a glance if the business is on or off track.

If something is off track in any of these key areas, you have a conversation in that weekly leadership meeting about who's going to do what by when. What are the next actions to improve the situation?

So, great financials. A scorecard. A weekly leadership meeting. Really solid controls.

I see a lot of businesses lose a lot of money due to a lack of controls. A lack of controls allows costly mistakes to happen. It also allows for dishonesty.

So, really strong controls.

If you can have those things in place, and I think this is every bit as important as the other things I just mentioned, you've got to make sure that your team knows that you care. That you care about the business and that you care about them.

There are different ways that you can do that.

Those are the things that I would say are most important if you want to become an absentee business owner. And I would challenge you to come up with a different term for it.

I'm going to be thinking about that myself because I think there's got to be a better term.

I'm going to leave you with one more thing that I think is critical if you're going to step away from the business a bit.

You've got to make sure that your team knows that you care. That you care about the business and that you care about them.

You can't just walk away.

If you walk away and they don't know that you care, my guess is that it might not happen overnight, but they will also stop caring.

And that won't be good for the business. It won't be good for you. It won't be good for them.

If you want to talk about any of this, don't ever hesitate. Reach out to me at [email protected], or just click the link below this video and book a call with me.