What is a Semi-Absentee Owner?
What is a Passive Investor?
For the most part, “Semi-absentee owner” and “Passive Investor” are synonymous terms. In the world of business ownership, there can be many roles an owner might take in the business’s day-to-day activity. Some businesses and franchises allow owners to be passive investors or semi-absentee owners, meaning they are not involved in the day-to-day activities but play an overall management role. In many cases, they manage the manager(s). If the business is run from an office or store, they may not need to visit the location frequently and just manage the affairs from home or from another job location. On the same note, if the business is a mobile model, they might have a hands-on person out in the field managing the crew and their duties on a daily basis. A business model that allows passive ownership must have a streamlined system in place for the role to be successful. When the business is in the process of opening, the passive investor will be busy learning the system and how to run the business. They will be developing their own operational plan and must be confident all the moving parts are running smoothly before taking that passive role.
This is different than the role of owner-operator whose function is more hands-on and interactive with most aspects of the business.