I get this question a lot: “Do you have any absentee businesses for sale?”

I imagine a hopeful buyer picturing themselves sipping a margarita on a beach while their business magically churns out passive income. Sounds nice, right? In reality, it’s more like a mirage—tempting, but tricky to reach.

Let’s start by defining what we mean by a semi-absentee or absentee business. In my book, it’s a business that demands anywhere from 0 to 20 hours a week of your actual, hands-on involvement—whether that’s performing labor, providing services, handling administrative tasks, or just making executive decisions from your favorite beachside lounge chair.

Now, because I operate in the heart of Silicon Valley, I naturally get a lot of inquiries from tech folks with cash burning a hole in their pocket, eager to “invest” in a side business while keeping their high-paying jobs. Makes perfect sense. In reality? It’s more like everyone’s sweet dream.

As an entrepreneur and business broker who’s seen his fair share of deals, I’ve come to a simple conclusion: Most businesses priced below $3M struggle to function as absentee, and those under $1.5M? Forget about it. At best, they’re semi-absentee. Let me break it down into 3 key factors:

• Economics
• Experience
• Management & Leadership

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The Economics of Absentee Business

Let’s take a typical small retail business with $1.5M in revenue per year. Here’s a quick breakdown of annual expenses:

• • Cost of Goods Sold (50-60%) → $825,000
  • Labor Cost (15-25%) → $300,000
  • Rent & Utilities (5-10%) → $112,500
  • Insurance (1-2%) → $22,500

That’s already $1,260,000 in major expenses, leaving you with $240,000 in net profit (a respectable 16% margin). But wait—does that include your own salary? What about other expenses like:

• • Marketing
  • Maintenance & Repairs
  • Transportation & Shipping
  • Taxes
  • Professional Services

If you want to be hands-off and hire managers to run everything, expect that 16% margin to shrink fast—possibly to 0-10%, or even negative. So, can you be absentee in this scenario? Not impossible, but certainly not easy.

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Experience: The Cost of Learning the Hard Way

Experience means making enough dumb mistakes in a business until you’ve learned how to run it efficiently. Trust me, I’ve been there. Some of my past business decisions were so bad they should have their own Hall of Fame. But guess what? That’s part of the process.

Some folks think you can just buy experience. Sure, you can pay for consultants, but at the end of the day, if your business is running on razor-thin margins, you’ll likely end up rolling up your sleeves anyway—just to keep the ship afloat.

Can you be absentee in this scenario? Again, not impossible, but certainly not easy.

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Management & Leadership: The Ultimate X-Factor

Now, this is where things really get interesting; this is the wild card. Your ability to run an absentee business ultimately depends on your management and leadership skills.

In my opinion, this alone can determine whether your business thrives or crashes and burns. It’s also the hardest to measure because it requires:

• Mental and physical resilience
• Decision-making skills
• The ability to hire and actually trust the right people
• A little bit of faith, and maybe even some compassion

Running a business is about managing two key resources: people and money. Capital is finite, but people—if managed effectively—can make the impossible happen. If mismanaged, though? They’ll burn your business down faster than a bad Yelp review.

So, can you be absentee here? Yes, it’s possible. But it requires a rare type of personality—someone with strong leadership, a solid business model, and the patience to build a team that won’t crash the ship the moment you step away.

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Final Thoughts

Want a truly absentee business? Either pay up (we’re talking $3-5M+) or put in the time to become the kind of owner who can build a self-sustaining operation. The truth is, even with the cash, you’ll still need the leadership skills to inspire from a distance while others fight the daily battles to grow your empire.

In my next blog post, I’ll dive into why compassion is a superpower for small business owners—backed by data and personal experience. Stay tuned!