Too much dependence = less value

An owner-centric business can make it more difficult to sell and can even reduce its value. If a potential external or internal buyer can’t fill your shoes, then they must either hire talent to replace your lost skillset, or keep you on for an extended period of time to help with the transition.  Adding headcount means less profit and therefore less value. An extended transition means more risk to the buyer, (what if the business can’t be as successful without you) which again makes it less valuable.

Even if you don’t plan on selling any time soon, getting the business less dependent on you can provide value in other ways. How much would it be worth to you if you could spend 10 less hours a week at work? What would it mean to those you care about if you had more time to spend with them? How would it feel if you could take 3 months off comfortably knowing that your company is humming along fine without you?

Some owners who have had this concept presented to them have many excuses why they can’t take their fingerprints off the business. The most common ones are, “I’d love for the business to be less dependent on me, but I’m too busy to train someone else.”, “I’m involved because a mistake would be too expensive.” There’s also the classic “No one can do this as well as me!” No one is saying its easy. On the other hand, owners that have been able to overcome these obstacles have created more business value and a better quality of life for themselves. And some who initially thought they wanted to sell had a change of heart. Once they found that the business wasn’t running them, ownership became enjoyable again and it was worth keeping.