You are on the beach, at last. At lunchtime your phone buzzes: an important customer who only wants to talk to you. In the afternoon your foreman calls because he doesn’t know whom to pay first. In the evening you check your email, “just for a moment”. By the fourth day you are already thinking about going back.
If it sounds familiar, it is not your fault. It is what happens when a company grows around one person. But the day you want to sell it, that detail has a price.
In 30 seconds
- A buyer does not pay for how hard you work, but for what will keep running when you are not there.
- The more the company depends on its owner, the less the buyer pays, the more of the payment is deferred and the longer they ask you to stay.
- It can be fixed, but it takes one to two years. Start before you want to sell.
What a buyer sees when they look at you
Anyone considering buying your company asks a simple question: what happens to this the day after the owner leaves? If the answer is “it depends”, they are not buying a business. They are buying a risk.
That dependence tends to hide in four places:
- Customers. The most important ones buy because of their relationship with you, not because of your company.
- Decisions. Prices, discounts, hiring: everything goes through your desk.
- Knowledge. How things are done is in your head, not in written processes.
- Key contacts. The bank, strategic suppliers or partners know you, not your team.
What it costs you in euros
There is no official table of discounts for owner dependence, and every transaction is different. But in offers it shows up in three ways: a lower multiple, more deferred money and a commitment to stay.
- Fewer times the profit. Future cash flow is less certain, and the buyer pays a lower multiple for it.
- More deferred money. To make sure you stay, part of the price is tied to your continued presence or to the results of the following years.
- A commitment to stay. They will ask you to stay one, two or three years to hand over customers and knowledge.
A hypothetical example. Two companies with the same profit, €600,000. Company A works without its owner and is valued at 5.5 times; company B depends on its owner and is valued at 4.5 times, with more of the price deferred:
- What you receive on signing
- Deferred or tied to you staying
The headline prices differ by €600,000. But what reaches your account on signing day differs by €1.35 million, and the rest of B depends on you staying on.
A buyer does not pay for how hard you work. They pay for what will keep running when you are not there.
Preparation matters. In the United States, according to the Exit Planning Institute, only 20% to 30% of companies that go to market end up selling. We are not aware of an equivalent published figure for Spain.
The holiday test
Tick the statements that apply to your company. Nothing is saved: it is between you and yourself.
How to fix it
It cannot be fixed over a weekend, but it does not take a revolution either. There are four moves, and the order matters. Making them before going to market is what makes the difference.
First, write down what only you know
Key processes, prices and special terms for each customer, passwords and powers of attorney. What is not written down cannot be handed over.
Then, give your second tier authority
Spending limits, pricing decisions, targets and a variable bonus tied to results. Let them decide, and let them get it wrong while you are still close by.
Next, hand over the relationships
Introduce your ten biggest customers and suppliers to whoever will carry them with you, and make it clear that the service does not change.
Last, run the rehearsal
Disappear for four weeks for real and note what breaks. It is the cheapest audit there is.
How many days in a row could you disappear tomorrow without anything breaking? That answer weighs as much in the price as your latest balance sheet.
Hypothetical example with illustrative figures. The test is indicative and does not replace a valuation.
Source for the US sale figure: Exit Planning Institute, State of Owner Readiness (exit-planning-institute.org).
