Small Business and the Absent Owner
February 23, 2021
Although many small businesses can be quite large as defined by the number of employees (usually 500 or less in the U.S.) or by a combination of employees and gross sales in other countries, they may still be owned and operated by one individual or, perhaps, a family or a few owners. And, of course, many small businesses simply have an owner and only a few employees.
Regardless of the size, the owner or owners cannot be expected to be at the business at all times. In fact, many small businesses have owners who rarely show up and delegate operational responsibilities to a chief operating officer or general manager. Other owners work full-time in their businesses but certainly cannot be expected to be at the business from the time it opens until the time it closes. With this being the case, a relevant question is, “How does a small business with a limited number of employees operate when the owner is absent?”
It’s All About Management
Some small business owners view their businesses as investments rather than an occupation and may have another full-time job or be retired. Other small business owners work full-time in their businesses but obviously need to leave periodically during the day or be away for training, to attend conferences or markets, or even take much-needed vacations.
For whatever reason when an owner is absent, many times there is a problem of absentee ownership. How does the business operate when the owner is absent, and who is to take over during these times? Is managerial talent available? With a limited number of employees, experienced or inexperienced, full-time or part-time, small businesses are forced to rely on the group of employees to efficiently run the operation. Some businesses operate in these situations without any problems. Others, however, fall miserably short during these times.
Training Is A Must
The answer, of course, to the dilemma of absentee ownership is trained and efficient management. Some employees will act as responsible as the owner when the owner is not present; others, unfortunately, will fall short of the mark. Employees without management experience cannot be expected to temporarily step in for an owner and manage the business with the same efficiency. So often, it is not for a lack of desire but more due to a lack of training.
With limited employees, frequently the “manager” in charge is whoever happens to have the most seniority on that particular hour or day when the owner is out. In their defense, they certainly might not have had any training on how to manage employees. They are simply put into the position of temporary management by default. Perhaps, they might be given the authority to make simply decisions and direct other employees what to do. At other times, they may be given the responsibility to manage but not the accompanying authority to actually manage. The business then runs in a haphazard, inefficient manner during the owner’s absence. If even for only a short period of time, this can be detrimental to the business.
Management training is essential for small businesses with an owner and a few employees just as it is necessary in larger businesses. Employees cannot be expected to effectively manage without proper training. In a small business, this might be simply an owner mentoring a senior employee as a manager designee when the owner is absent and allows the employee to step into a temporary management role, so the business can continue to operate efficiently as if the owner was present.
Does It Really Matter?
Some owners might ask, “Does it really matter if I have a good manager while I’m gone for only a short period of time?” What the owner does not realize with this scenario is the negative effect a poorly run business can have on customers. Maybe, an employee is discourteous to a customer in person, on the phone, or a host of other things that can ruin a buying experience for a customer. This short-term lack of strong management can affect the satisfaction or dissatisfaction level of customers toward the business. Just one misstep might be enough for a customer or prospect to decide not to return, and the owner never knows the reason. This situation can be greatly magnified when the owner is absent for a longer period of time or is completely absent.
Absentee Ownership Can Work
Absentee ownership can certainly work in a small business and does all the time. The key is to have a strong manager during the owner’s absence. This is more than having just any employee designated as the manager for a couple of hours or a couple of days. The task for small business owners is to mentor talented employees so they are able to assume a managerial role immediately when needed. Owners never know when they will suddenly be called away from the business. Absentee ownership, strong management, and customer satisfaction are all related. Don’t let absentee ownership run customers to your competitors. Make absentee ownership work for you in the right way.