Are You An Owner Investor Or Owner Manager?
by APSense News Release Admin
Historically, small, privately-owned businesses have always been hard to sell.
This is due to a number of factors:
- Lack of liquidity;
- Personal goodwill as opposed to business goodwill; &
- Lack of depth in business funding for small businesses.
So owning a small business has usually meant making your money throughout the life of running it.
As opposed to relying on a single large liquidity event, which normally occurs through a successful sale of the business.
But a big factor contributing to this state of affairs comes down to a significant personal trait.
Owner Investor or Owner Manager?
Most small business owners run their business as an owner manager instead of an owner investor.
So what’s the difference?
The owner manager is caught-up in the day-to-day running of the business.
Supplier issues, customer issues, staff issues … they all come under the owner manager’s umbrella.
The owner investor, on the other hand, concerns him or herself with more strategic matters and employs someone to run the business on a day-to-day basis.
Issues such as mergers and acquisitions, takeovers and joint ventures all come under the owner investor’s umbrella.
The reason why the owner investor concentrates more on these issues than anything else is because they know that’s what increases the value of the business.
With size comes economies of scale and the possibility of getting on a bigger organisation’s radar for acquisition.
Which means your exit strategy can be mapped-out in advance.
There’s nothing wrong with being either an owner investor or own manager.
But having the awareness of which one you are (or want to be) can allow you to gain clarity as to what your most likely exit strategy for your business will be.
And with the effects of lockdowns, COVID-19, supply-chain issues and inflation, some business owners may now decide to switch from the owner manager to owner investor mindset to thrive.
For more informative articles in relation to business acquisition, visit Chlocra.com.
Created on Aug 29th 2022 18:18. Viewed 68 times.