The owner dependency scale

The more the business needs you, the less a buyer will pay for it.

The idea

The more the business needs you, the less a buyer will pay for it.

Buyers are not buying you. They are buying what continues after you leave.

A business where the owner holds the key relationships, the license, the pricing, and the hiring decisions is a business whose earnings walk out the door with the seller. Buyers price that risk with a lower multiple, a longer earn-out, or both.

Timing

The time to start the conversation is now

How far out you feel is not the signal. Buyers read the trailing numbers, so time before a sale is room to move them, not a waiting room. A founder with a number in mind may reach it in one sale or in two: a majority stake now, with equity rolled into the buyer’s company for a second sale later. The sale itself, once you sign, runs in four phases.

Read the exit timing window

The sale, signing to the wire

0–0 months

Prepare

Market

Select

Close

Four phases, for a company that is ready. The conversation can start any time before.

An estimate from past engagements, not a commitment.

The figure

Five levels of dependency

Level	Label	What it looks like	What it costs you
1	The owner is the business	The owner sells, prices, hires, and holds the license	Multiple at the floor; heavy earn-out; long transition
2	Owner-led with help	A capable second, but decisions route through the owner	Below-mid multiple; meaningful earn-out
3	Owner-managed	Managers run functions; the owner sets direction	Mid-range; standard transition
4	Owner-supervised	Management runs it; the owner reviews monthly	Upper range; short transition
5	Owner-optional	The business runs without the owner for 90 days	Top of the range; a clean exit is possible

How to read it

A scale from one to five measuring how much the business depends on its owner. Each step down in dependency removes a reason for the buyer to discount the price or defer it.