Is Your Business Too Dependent on You?
Running a successful business doesn’t mean being involved in every little thing. In fact, being too involved can cost you — especially when it’s time to exit.
In this episode of Exit Insights, hosts Darryl Bates-Brownsword and Kevin Harrington shine a spotlight on owner dependence — what it really means, how to identify it in your business, and what to do about it. If you’ve ever felt like you’re the only one holding everything together, this episode is for you.
⚠️ Why Owner Dependence Is a Problem
Buyers don’t want a business that can’t function without its owner. If they sniff out owner dependence, they’ll either walk away or slash their offer. Kevin shares that owner-dependent businesses typically sell for 20–40% less — if they sell at all.
The good news? You can fix it. This episode walks you through how to remove yourself from daily operations, step by step.
???? Practical Tips You’ll Hear:
- Track your time and identify tasks you can delegate.
- Build a functional org chart to spot where you’re too involved.
- Document your processes to create consistency and free up your time.
- Train your team and give them room to own their roles.
- Start succession planning early — even before you think you need it.
Whether your goal is to sell your business, reduce stress, or step back without losing income, this episode gives you a clear path forward.
Topics covered:
- What owner dependence looks and feels like
- Why most buyers walk away from owner-reliant businesses
- The 5 stages of stepping back — from on the tools to passive shareholder
- How to start reducing owner involvement immediately
- Cultural signs of dependence and how to shift team mindset
Actionable tips:
- Conduct a time audit and compare it to your effective hourly rate
- Create a functional org chart
- Systemise tasks and create documentation
- Delegate responsibilities with training and performance tracking
- Build a culture of trust and clarity with defined responsibilities
Mentioned Resources:
- Exit Insights Owner Dependence White Paper
- exitinsights.co.uk for more tools and insights
Transcript
Darryl Bates-Brownsword (00:40)
Welcome to the podcast that’s dedicated to helping business owners create a business that they can exit on their terms. This is the Exit Insights podcast and I’m Darryl Bates-Brownsword, your host today and joining me is my, I was going to say partner in crime, my business partner, Kevin Harrington. Thanks again for joining me today. Kevin, in this episode.
We are going to talk about the big topic that we’re always talking about. And we’re to help business owners understand how to eliminate owner dependence in their business. It’s something every consultant talks about. Owner dependence, owner dependence, know, is your business owner dependent? Do you want your business to be exitable? You need to get rid of owner dependence. It’s a nice cliche, but what the hell does it mean? And how can you spot it in a business?
Kevin Harrington (01:25)
That’s a good point. And let’s talk about how a business with owner-dependence feels. What might an owner be thinking or saying if the business was over-dependent on them? I’ve got three or four to share here. A business owner might say, why do I need to check everything my team does? They might say, it’s all going well today, but will my business deliver for my retirement?
complete uncertainty about it. How can I get all my team and suppliers become ambassadors for the business? It might be, I seem to care more about this business than any of my team, or how do we grow this business and maintain our high standards, or we seem to regularly make the same mistakes, it’s expensive. Now, if people are recognizing one, two or three or more of those emotions or feelings,
in their business, there’s a significant chance the business is over dependent on that business owner. And the real issue here is that if a business is owner dependent, they typically sell for significant discounts from comparable businesses between 20 and 40 % because of over dependence. also, well, exactly, many, many fail to sell at all.
Darryl Bates-Brownsword (02:38)
Yeah. If they do get a deal at all.
Kevin Harrington (02:45)
Four out of five private companies brought to market never complete a sale. We know that, we’ve talked about it before. So this is an expensive and important issue.
Darryl Bates-Brownsword (02:54)
Yeah. And look, I think it’s really important to explore the telltale signs. And there’s several areas of telltale signs. One is how the owners and the culture is in the business, what the culture is like, how people are feeling as you started to play on. But it also shows up when businesses, they can be a decent size and people will come unsolicited and knock on your door and go, hey, look, I’m interested in buying your business.
And they’ll invariably walk away and they’ll, you know, that they won’t proceed with the deal and they’ll be very polite about it. And they’ll say, look, it’s just not the time, right time for us. Or, yeah, we’ve decided, you know, it’s not our strategy. And they’ll give you the old, it’s not you, it’s us. And we’ll walk away. And it’s just a polite walk away. Look, the reality is they were fishing around and they’re looking to acquire a business. They have an M &A strategy and they’re out there having a look around the market to see what’s going on.
They had a look at your business. You weren’t exit ready. The business couldn’t survive without your daily involvement, which just meant it’s too big a risk for them to acquire because they know that once they acquire you or your business, you’re going to nine times out of 10, the founders, you lose the energy with the business. They want a business that they can be sure it’ll continue on its growth journey without your daily involvement.
they’re seeing red flags, so they’re just walking away and going, hey, look, we’ll just move on to the next one, where it’ll let less risk for us. We want to return on our investment. So that’s half the equation, but what’s the cultural one? That’s the one where the culture is, well, the boss is always checking over my shoulder and micromanaging me, checking my work all the time. if they’re gonna check my work all the time, well, I can’t do anything that’s right. I can’t please them.
I’ll just do half the job and then they’re going to get and finish it anyway. So your staff and team lack motivation. They they’re not inspiring. They’re not challenged. They don’t want to step up because they just feel they get beat down all the time. What’s another one? Another one we see a lot is when the owner owners feel like they’re carrying the world on their shoulders, their work and all the hours God gave them, their stress to the eyeballs. They might be getting good money out of the business.
but they’re working a whole lot of hours and sacrificing lifestyle to make it work because they’re totally carrying the business, which is also hard work. it’s often the energy, the culture in a business that’s owner dependent is often flat. It’s often transactional. It’s not a lively, energizing, exciting place to be. Most people, if the boss, if the owners are frustrated,
then the team are frustrated because it’s not fun working for a stressed boss because that just filters down to you. and buyers see that staff see that, you know, it shows up in a high turnover of staff often depending on the industry you’re in. But it’s typically at varying levels, not a fun place to work when the owners are acting like control freaks and at various degrees.
but just dabbling and meddling in areas where they don’t need to. They need to step back and let people step up and do the job that you pay them to do.
Kevin Harrington (06:06)
Yeah, it’s good points and
Darryl Bates-Brownsword (06:07)
.
Kevin Harrington (06:08)
it from a slightly more kind of theoretical background. Businesses earning between let’s say, three and 50 million in revenues annually occupy this kind of really challenging middle ground. The issues we’re talking about here, you are the business is owner dependent if you’re three or four or five people. If you’re a PLC, it’s not owner dependent, you’ve got systems and processes in place.
Darryl Bates-Brownsword (06:21)
Yeah.
Yep.
Kevin Harrington (06:32)
So from three to 50 million pounds, it’s that challenging area. It’s too large to operate like a startup and too small to perhaps invest in the professional management structures that you need. And the owner who built the company from nothing tends to still perform the same hands-on roles as they did when their turnover was just half a million. So this is a force of habit thing. We completely understand it. We see it regularly.
and a change in behaviour of the whole business is required, which let’s talk about some of those steps that are required perhaps for this because that’s what we need to talk about.
Darryl Bates-Brownsword (07:12)
It’s a good point. I’m glad you raised the point on size of business, because I think a lot of people, when we talk about owner dependence, a lot of people would assume that we’re talking about sub one million pound revenue businesses. frankly, I expect all of them to be owner dependent, because a one million pound business is basically, we’ve talked about this a lot, it’s a business owner with 10 or more helpers. And there’s no, in a one million pound business, there’s no leadership team, there’s no hierarchy.
There’s no layers in the business. It’s one person with direct relationships with everyone. And it’s often a lifestyle business. can make good profit. But one million pound is an inflection point. And the next inflection point after that one million is that three million number that you mentioned. And to get scalable growth or sustainable growth, you really need to start thinking about these things now at the one million mark to get you to three mil and then to get you to 10.
30 and beyond. So what do we need to do? So that’s the question you ask. Well, how do we eliminate owner dependence? Well, why don’t we start with, I think the first one we need is, well, I think the first thing we need is some sort of structure. And I don’t mean copying an org chart from a corporate and just going, hey, look, that’s a structure. Let’s just create an org chart and go, who’s doing what in the business?
We need to turn that on its side and go, well, let’s create a functional organizational chart and organize the business based on functions. Because if we map out the functions, and this is fundamental to an SME business as opposed to a corporate, there’s more functions than people often. So we need to map out all of the functions and identify everything that needs to be done in the business. And then we need to assign someone to those functions, which
which as you’ll recognize in many SMEs and small businesses, people are involved in more than one function. But if you’ve got everything mapped out, you stand half a chance of stopping anything from slipping through the cracks. Because it’s when things are slipping through the cracks, they end up back on the owner’s desk. And it’s the things that slip through the cracks that means they’re fighting fires or keeping the plate spinning or whatever metaphor you want to talk about.
Kevin Harrington (09:25)
There’s a key point in here that we see when we’re running these functionality exercises with a client. You’re right, there’s more functions than people in most SMEs, that’s fine. But we go through and say, right, what things go on and now who does them? It really becomes evident with probably the majority of businesses we see, over 50%, that the owner ends up saying, well, I do that. No, I do that.
Darryl Bates-Brownsword (09:27)
Yeah.
Kevin Harrington (09:51)
And we’re saying, well, are you sure? Don’t you just mean the final stage of nodding it through? Or do you actually do that? No, no, I do that. I do that. No one else can do that. And we end up with the owner’s name strewn across the functionality chart. And all of a sudden, there’s that moment of, blimey, they’re right. That dawning of reality of just how severe this is.
Darryl Bates-Brownsword (10:02)
Not as good as me.
Kevin Harrington (10:20)
And actually, all with, at that point, all we’ve effectively done is discovered and made obvious the expensive problem that exists. But doing that is an important step towards that through that realization into solving it.
Darryl Bates-Brownsword (10:35)
Yeah. And look, since we’re getting in deep, one of the tips that I do with business owners at this stage when we’re going through this, go, look, let’s map out your diary and let’s identify what you get involved with. And let’s do this over three or four weeks and just break down your time and record everything that you get involved in. Week in, week out, you know, do it in 15 minute blocks if you can. And do this diligently. If you do a good diligent
record of what you get involved in, then we can see where you’re spending your time. Then what we can do is, here’s the exercise, is go, well, let’s have a look at how much money you’re taking out of the business you’re in. Because I’m not talking about your salary, I’m talking about just how much you take out of the business, what your, let’s call it your package is worth. And then we can figure out an hourly rate that you effectively pay yourself. So it’s just a representative exercise and you see how much you’re paying yourself.
Now, have a look on the things that you get involved in every single day and every one of those tasks that you pay, could pay someone less than your hourly rate to achieve, then let’s start there because they’re all the things where you’re just not adding value to the business and you’re dragging the business back, frankly. So there’s the first eye opener. Let’s just have a look at the things where you are getting involved in tasks that
are now blatantly obvious that you shouldn’t be. And you can see that you could get a VA, a PA, or even an employee or anyone to do those tasks at a lower hourly rate than you pay yourself. That’s going to free up often about half the time I see when I do that with business owners, Kevin.
Kevin Harrington (12:14)
Yeah, and
let’s be clear, if people want to carry on doing those tasks, they’re welcome to, but all that pain we’ve been talking about the ability to sell the business at the right price, if they can sell it at all, those handicaps will carry on existing. Many people when they’re made aware of these issues,
Darryl Bates-Brownsword (12:30)
Yeah.
Kevin Harrington (12:34)
don’t actually do something about it. Now I find that quite fascinating. And I think sometimes it’s, this is kind of a negative statement really, but sometimes it’s because people are absolute control freaks. And there’s not much one can do about that. But other times, and I think there’s a lot of people we’ve worked with kind of happily over the years, are people that go, but I don’t know how to deal with this. It’s outside of my capability. You you’re talking about stuff I’ve never dealt with before.
And I’ve still got all those things to do tomorrow that are still on the functionality chart. I’m busy person. And it takes a brave business owner, a brave business leader to take one step down this road to start to address it. And it’s not as complicated as it sounds at first. mean, for us, this is everyday stuff. Day in, day out, we’re having these conversations. We’re helping people on these things.
Darryl Bates-Brownsword (13:03)
Yep.
Yeah.
Kevin Harrington (13:24)
This new territory,
intellectually, business owners get really quickly. They tend to be very curious, they tend to go, well, how’s that gonna work then? And we start explaining it and it starts painting a picture of a bright new world that becomes scalable. And one of the very first things is simply building management capability. Why are you doing all the jobs no one else has been allowed to or is capable of doing it?
So how do we go about that? What advice do you give to people on that Darryl?
Darryl Bates-Brownsword (13:54)
Yeah. Well, the first thing is, think, as we touched on, we need to get a map of everything that needs to be done, because often that’s fresh and new. And having that map and identifying and put it on paper or computer, digital, whatever you like, just going, here’s everything we need to do. There’s the first aha moment. We need to do all these things year in, year out. And when you cross reference that with all of your existing job descriptions, you see that there’s a whole lot of gaps, a whole lot of unassigned
tasks and areas in the business. And there might be things that only need to be done once or twice or a few times a year, but they’re not assigned to anyone and anyone’s job descriptions. So they’re not getting done. And you’ve got expectations and assumptions that they are being done. And that’s when disappointments occur. So I know I haven’t answered your question, but we’re getting there. So we’re talking about business owners going.
Hey, we do this exercise and we free up their time. We haven’t even talked about what to replace that time with yet, but often the resistance is fear as you suggest. But I’m the best at doing those tasks. No one can do those things as well as me. And that’s when we’ve got to challenge you. Does it really need to be done as well as you do it? Or is 80 % realistically good enough to do a good job for the client or for the business?
is 80, 90 % good enough to get to the next step. And then if you’re the only one who does it that well, well, let’s start to document the process of how you do it and then capture it and go, here’s what’s good enough looks like for me. Here’s the way I want the task to be performed. Here’s the process, the procedure, whatever you want to call it, but it’s now documented. When it’s documented with a…
a measure of effectiveness, if you like, you can then train someone in how to do it. And now you can keep someone accountable and go, this is the way I want it done. Here’s the procedure to follow. If you get stuck, come back to me. But there’s the first way to start delegating and handing over tasks so that you can free up your time and know that it’s being done to your standard because you’ve trained people and you’ve got some measures and monitoring now in place. You’re measuring that things are happening the way you want them to be happening.
That’s the first step in being able to delegate and maintain control and have things coming back to you so you know when non-compliance issues come up because your reporting system will capture it. It’s a training issue. It’s a new habit, as you talked about. People keep doing things they’ve always done, and they need to do step by step and get comfortable that the process works, that they can hand over some of the smaller tasks.
to people and start to, and train them in how to do those tasks and have that documented agreed methodology for performing each of those tasks. And step by step, they’ll gradually get more comfortable with letting go. Now, once they’ve done that, they can either do more of the things because they’ve got free time, they can now either do more of the things that they’re doing that you would pay yourself that hourly rate for. Or if you want to grow the business,
then you need to be doing the things and going, okay, what are they, I’ve now freed up some time. Where can I spend my time in adding value to the business? How can I now leverage this time that I feel that I’ve created and multiply the business rather than just incrementally grow it year by year? How do I really take advantage of this opportunity I’ve created? Because I’ve now started to get everyone…
doing things the way I want them to be done because they’re all documented and systemized and trained in the way I want them done.
Kevin Harrington (17:35)
Yeah, and the side effect of that, which is an added bonus, is you end up with a team of people that are probably enjoying their jobs a lot more, because they’re understanding better what context they’re working within, they’re understanding the quality that’s required, and they’re delivering it. And they’re satisfying people in the chain of whatever goes on in that business. And you probably end up with lower staff turnover.
Darryl Bates-Brownsword (17:41)
Thank
Yeah.
Kevin Harrington (18:02)
and you’re probably starting to create the beginnings of a succession plan where you identify people that are actually really capable of moving to some of next levels. So not only are you reducing own independence, you’re creating a team of people that have much more real and intrinsic value.
Darryl Bates-Brownsword (18:21)
Yeah. And hopefully it’s obvious, but this process of documenting how you want tasks performed or processes you’re documenting, you replicate that not just over the tasks that you’re letting go, but as you’re letting go, you’re starting to document the way the whole business works. So then you can train people. Now, your point around people thrive in an environment where they know exactly what’s expected of them.
They know how far they know that the bands, if you like, are the limits of their responsibility, what they’re accountable for. It’s really clear what they what’s expected of them. It’s in their job description and also the process on how to do it. Now, this isn’t constraining. It’s actually liberating because they they know that as long as they perform within those guide rails, they’ll they’re they’re able to do their job without any interference.
But there are always exceptions to the rule. And sometimes, you know, things pop out of the guidelines, guide rails. And that’s when you get to apply your creativity or get others in to help to solve problems because they’re exceptions to the rule. But it does actually create that freedom, if you like, in the framework for people to step up because they know what’s expected of them. And it’s a work environment where they can thrive in that framework.
Kevin Harrington (19:42)
Yeah, and there’s you’ve triggered another thought while you’re talking there. We’ve talked about passing on workload in a defined way to people. There’s particular workload that owners clutch onto and because it’s theirs to look after. It’s the relationships the business has. Now for me, these be relationships with suppliers. So it could be people that supply materials or services or
Darryl Bates-Brownsword (20:01)
Yeah.
Kevin Harrington (20:07)
be people that supply money, could be the bank, all sorts of supply side relationships, but also client relationships. And the thought of walking away from looking after those relationships is a bit petrifying for a business owner. And I fully understand that. Because quite often, there are sensitivities around it. And if a relationship goes wrong, that could be costly for the business. So a couple of things here, if you’ve got
Darryl Bates-Brownsword (20:24)
vulnerable.
Kevin Harrington (20:36)
supplier or client relationships, that if one of them failed, it presents dooms the business. That’s a different thing from owner dependence. You’ve actually got a real and material risk in your business of a dependence on an outside force. So find a replacement, find an additional, whatever’s going on, even if you’re not trying to get rid of your owner dependence. If you’re dependent on a supplier or a client, that’s going to make a financial difference if they disappear.
sorted out now. But if you want relationships to grow, clutching onto them isn’t the best way of doing it. Yes, you’re in charge. Yeah, you’re in charge of the relationship. Of course you are, it’s your business. And you might well have a personal relationship with the principal in a client company. But start getting your newly developing management team, leadership team.
Darryl Bates-Brownsword (21:14)
Replicate.
Kevin Harrington (21:32)
Get one or two of them to join you in meetings where you wouldn’t normally have them. Get them seeing how you operate. Get them to learn how you speak. Get them to understand how that relationship works. And gradually over time, and I’m not talking a long time, three or four meetings time, all of a sudden you’ll be surprised about how if you’ve selected those right people in the leadership team, they start to make a material and valuable contribution to that business relationship.
They’ll come up with ideas. They’ll remember things that got forgotten from the last meeting. And your business is stronger. It’s multiple points of contact to a client rather than one. Makes it stronger. Doesn’t make it weaker.
Darryl Bates-Brownsword (22:13)
Yeah. So what are we talking? So we’ve said that, hey, look, this applies to businesses typically in the one all the way through to 30 plus revenue range, depending on where they’re at. Every business is going to go through various stages of owner dependence. Like what’s the first layer of owner dependence? Well, that’s when the business owners are on the tools. They’re customer facing, they’re doing the job, they’re doing the sales, they’re doing all of the delivery work. So the first
first area you want to do is extract yourself succession strategy and get yourself off the tools. Get yourself away from doing that primary delivery work and get yourself into one of these management or leadership roles. Now, this is going to depend on the size of your business, but this is the thinking we need you to take or that you need to take if you want to create realizable value in your business. If you’ve got an aspiration that you want to sell your business for one day,
or you want the business to be able to run without you and provide some sort of passive income without your involvement, this is the thinking you need to take. So get off the tools, get into a management function where you’re leading the function and leading others and not directly that key person. Next stage is, you want to get yourself out of that management responsibility. You’re no longer a functional manager. You’re now really in a full-time CEO type role for the business. You have no…
functional responsibility, you’re just leading and guiding and driving the business and keeping everyone else accountable to their targets and goals and ensuring the business is on track with its business plans and monitoring and tracking and driving and leading the strategy for the next few years. That’s when you’re in the CEO role. Now, the next layer is to how do you extract yourself out of that CEO role?
and get yourself into a primary chair role in the business where you’re on the board and you’re not operational in the business at all. You’ve got a CEO in the business, you’ve got a full management team in the business, and you’ve got a full team of people running, doing all of the tasks at the operational level. Now as the chair, your role is really, you shouldn’t be doing anything operational in the business at all. You’re non-executive at this stage.
Your people are going to look for you for guidance on culture. And because when they see the shareholders in the business, they’re going to take that that lead on on culture. They’re going to be looking for you on the board for for inspiration on the vision and driving the business foot towards its purpose and fulfilling that purpose and getting that culture. So there and the board, you’re also developing the board now so you’ve got a fully government board that’s managing risk and governance for the business and driving strategy.
Right the way up to you’ve probably got a 30, 50 million pound business, do you got a fully non-exec board? Now, the next stage, if we’re talking about stages in succession and eliminating owner dependence totally, the next stage is to extract yourself from the board when you’re only just a shareholder. Now that’s succession, full succession if you like, you’re no longer involved in the business, you’re not involved in the board.
So you’re not involved in any income from the business. You’re not taking any control by being involved in the board. You’re purely a shareholder looking for returns as a shareholder. At this point, you’re an absent shareholder and you’ve got other risks you need to address and make sure that the business is just depending on the size of it, doesn’t evaporate under your feet. You need to make sure you can only take this step.
If the business is fully owner independent, resilient and can really operate without your day to day involvement, without any risk to the value of your shares. The last step in succession and exit planning is for you to sell your equity. Now, now you can progress through each of these steps at any time you like when the business is ready and you can go as far as you like. We’re just going, this is the full model that you can follow. You take it as far as you like or what works for you.
Some people stop at chairman, some people stop in the CEO role. It’s up to you on what meets your desires and lifestyles and ambitions and targets and what you want to get involved in day to day. know, heck, we even meet people who say, look, I want to stay on the tools. I love doing the job. And I’ll just appoint a CEO around me. And it’s tough to build a functional business where you’re on the tools and you’re the owner, but you’ve got an appointed as CEO. Doesn’t always work, but it can work.
So there’s a framework that we can follow and just go depending on where you are in your stage of business is where you can dip in and start to go, okay, so what are the other things I need to do to eliminate owner dependence in my business? Yeah, it’s really easy on paper. The theory is really easy, but how do I do it? How do I put these systems, these structures, these methodologies in place and create the culture to help me eliminate owner dependence in my business? Because the culture is the big piece.
and it’s what will lead this.
Kevin Harrington (27:11)
Very good. You took that a stage further than I was expecting, talking about being a passive shareholder. But that is the end game, isn’t it? And selling those shares as well. And people can decide, as you alluded, to exactly how far down this trail they want to go. But our experience with business owners is that each step they take, the more the business is worth and the better life the business owner is having.
Darryl Bates-Brownsword (27:21)
and
Kevin Harrington (27:36)
and it gives them at every stage of moving away from being owner dependent as a business, it becomes a kind of a more fun and more profitable place to be. people have listened to half an hour of us talking about this. Hopefully it’s been really useful. In the show notes, we’ve just done a white paper, Darryl, on owner dependence. We’ll put the link for this in the show notes.
Darryl Bates-Brownsword (27:45)
Yeah, absolutely.
Yep.
Good idea.
Kevin Harrington (28:02)
And also people can go to exitinsights.co.uk and it’ll be on the website as well. And that’s a start point for reading more and taking it all in. And then give us a shout, talk to us, we can help you on this subject.
Darryl Bates-Brownsword (28:16)
Yeah, this is the sort of thing we get involved in day to day. a bit of a favorite topic doing this and implementing this and just helping business owners get more money because it’s more profitable business, get more time and get rid of all that stress. So that’s a good way to wrap it up, I think.
Kevin Harrington (28:30)
Excellent and good to do a podcast with you again, Darryl. Thank you.
Darryl Bates-Brownsword (28:38)
Okay, Kevin. Okay. Thanks everyone and we’ll see you in next week’s episode.