Owner dependency

Owner dependency is the share of a business's revenue, operations and relationships that exists because of the specific person who owns it. It is the part of the business that cannot be handed over, only rebuilt.

At a $50,000 to $150,000 deal, a buyer is acquiring a business they will personally operate for some years. They model two things: how many hours a week it takes, and which of those hours require skills or relationships only you have. Low dependency means a competent operator can hold the numbers steady from week one. High dependency means the buyer is acquiring a role rather than an asset, and they price accordingly.

Where it bites

In the questions that follow the financials. Who answers support, and how long does it take you. Who writes the content, closes the enterprise accounts, handles the refunds, ships the fixes. A seller who says "only about five hours a week" and then cannot explain who does the other work is describing dependency without naming it.

Worked example

A B2B tool at $3,800 MRR and roughly $41,000 of trailing annual profit. The founder runs a 30 minute demo for every new account, and demos convert at four times the self-serve rate. Strip the demos out and the growth rate halves, so the buyer is really acquiring $41,000 of profit plus an unpaid sales job.

Two comparable offers came in at 2× rather than the 3× the numbers would otherwise support, a gap of roughly $41,000. Nine months of work replacing the demo with a recorded walkthrough, a trial sequence and onboarding documentation would have closed most of that gap.

Owner dependency is the cheapest problem to fix early and the most expensive to discover during diligence. Write down what you do, then remove yourself from it one task at a time. The test is simple. If you went quiet for a month, what would the buyer find when they came back.

Related: transferability, operating-documentation, handover-period