Owner Dependency
How much the business needs you personally to keep running — the single biggest valuation killer in small-business sales.
Owner dependency measures how much of the business sits in your head, on your phone, or in your relationships rather than in documented systems and a real team. The classic test buyers run: "If the owner disappeared for six months, what breaks?" If the answer is "everything," the business has high owner dependency. If the answer is "the owner does some specific things, but operations, sales, and customer relationships continue without them," the dependency is lower. For sub-$1M businesses, some owner dependency is expected — these are owner-operator businesses by definition. The question buyers ask isn't "does the owner work in the business?" — it's "could a different owner step in and run it the same way?"
Owner dependency is the single most common reason small-business sales close at lower multiples than the seller expected. Whether the deal is six figures or nine, buyers are asking the same question — could a different owner step in and run this the same way?
Buyers run a simple test in their head — if the owner disappeared for six months, what breaks?
Find out what a buyer would see in your business — before you talk to one.
The Exit Desk free assessment takes 2 minutes. If you'd rather see what a full report looks like first, read a sample.
