One of the most common questions I get from buyers is some version of this:

“How quickly can I hire someone to run the business for me?”

Or more directly:

“How do I become an absentee owner?”

It’s an understandable instinct. You’re looking at a leveraged acquisition, you see the potential for cash flow, and naturally you want to create distance between yourself and the day-to-day.

But on a first deal, this is usually the wrong move.

Although it can work, most people underestimate what they’re actually giving up when they step out of the operator role.

 

The Core Problem: You Carry the Risk. They Don’t.

Most small business acquisitions, especially in the Buy Then Build model, are financed with debt.

Often, that includes a personal guarantee.

That changes everything.

When you personally guarantee a loan, there is no easy way out. You’re responsible for the outcome, regardless of what happens inside the business. That pressure drives behavior. It forces you to solve problems, push through friction, and stay engaged when things get hard.

The person you hire to run the business doesn’t have that same pressure.

They don’t have the same downside.
They don’t have the same exposure.

And because of that, they won’t operate with the same level of conviction.

 

 

That’s not a knock on them, it’s just reality.

When things get difficult, they have an “easy path back to the car.” Another job. Another opportunity. Another company.

You don’t.

 

Leadership Isn’t Delegable (At First)

There’s another issue that’s harder to quantify, but just as important: leadership.

A business tends to take on the personality of its leader. Strategy, culture, accountability, these don’t exist in a vacuum. They’re set and reinforced by the person at the top.

If that’s not you, you’re outsourcing one of the most critical variables in the entire investment.

On a first acquisition, that’s a big risk.

You’re still learning the business. You’re still learning how to lead in this context. You’re still figuring out what works and what doesn’t.

Stepping out too early means you’re relying on someone else to establish the foundation, without having built it yourself.

 

The Real Risks of Hiring a GM Too Early

There are a few specific risks that show up over and over again.

 

1. They can leave.

No matter how well you hire, you don’t control their long-term decisions.

I’ve had general managers get approached by other companies with better offers. At first, they turn them down. Eventually, one comes along that they can’t ignore.

Now you have a problem.

You hired them so you wouldn’t have to be in the business. But now you’re back in, urgently trying to stabilize operations, replace leadership, and protect the asset.

That’s not theoretical. That happens.

 

2. Hiring is hard, especially at the top.

A miss at the leadership level isn’t a small mistake.

It’s expensive. It’s disruptive. And it can derail your entire strategy.

If you hire someone who can’t execute, doesn’t fit the team, or struggles with the customer base, you can lose time, momentum, money, and often credibility inside the organization.

You can course-correct issues in the business in real time when you’re the operator, but when you’re not, you’re further removed from the problem and also removed from providing the best solution.

 

3. You’re giving up control of a leveraged asset.

This is the one most people don’t fully appreciate.

You’re taking on significant debt, sometimes 80–90% of the purchase price, and then handing operational control to someone else.

That combination, high leverage plus reduced control, is where risk starts to compound.

 

 

So Why Do It At All?

With all of that said, hiring a general manager can be incredibly powerful, when done at the right time and in the right way.

There are real benefits.

 

1. You can leverage your time.

This is how you move beyond a single business.

I’ve owned multiple companies at once, across different verticals, because I had capable operators running specific businesses. That allowed me to allocate my time differently, whether that’s starting something new, investing elsewhere, or focusing on higher-level strategy.

Without that structure, you’re capped.

 

2. You can increase your return on capital.

You’re still benefiting from the full economics of the deal.

You own the equity. You’re capturing the upside. But you’re not required to be in the day-to-day operations.

That allows you to scale your involvement across multiple opportunities, while still building equity in each one.

 

3. You create opportunity for other people.

There are talented operators who are excellent at running businesses but don’t have the appetite, or the ability, to take on acquisition risk.

This structure allows them to do what they’re best at: lead teams, manage operations, and grow organizations.

You take the risk. They take the role.

That alignment can work very well, if it’s set up correctly.

 

Source: Buy Back Your Time: Get Unstuck, Reclaim Your Freedom, and Build Your Empire

 

How to Do It Without Creating New Problems

If you’re going to hire someone to run a business, there are a few principles that matter.

 

1. Match the person to the business before you buy it.

Don’t acquire a company and then start looking for a general manager.

That’s backwards.

You want to know, before you close, who could step into that role. Someone whose background, experience, and strengths align with the business you’re acquiring.

That way, when the opportunity shows up, you’re not scrambling. You’re selecting.

 

2. Hire for intelligence, drive, and integrity.

This is a simple framework, but it holds up.

• Intelligence: can they figure things out?
• Drive: will they push when things get hard?
• Integrity: can you trust them?

 

You need all three, but if one is non-negotiable, it’s integrity.

Because without it, the other two can work against you.

 

3. Don’t give equity upfront.

This is where a lot of buyers make a mistake.

They think:

“I’ll give my operator equity so they’re aligned.”

But that introduces a new set of risks.

You now have someone who doesn’t share your financial exposure, can leave, and still owns a piece of your company.

Even with vesting schedules, you can end up in a situation where someone walks away with meaningful ownership after contributing less than expected.

Instead, I use phantom equity.

It gives them the economic upside of ownership, particularly at exit, without transferring actual ownership of the company.

 

Source: Trica Equity

 

They participate in the outcome.
But control stays where it should.

If they want real equity, there’s a path to it, typically tied to taking on risk alongside me.

 

The Bottom Line

Hiring a general manager can be a powerful way to scale.

But on your first deal, it’s usually premature.

You need to understand the business.
You need to establish leadership.
You need to build the foundation yourself.

Because at the end of the day, you’re the one carrying the risk.

And until you’ve earned the right to step back, giving up control isn’t leverage.

It’s exposure.

​​Ready to acquire a business in the next 12 months? The Acquisition Lab is your first stop. Reach out to us today and get on the fast track to becoming an acquisition entrepreneur.