Why owner‑dependence is the first number a buyer discounts

Many owners think they are selling a business. A buyer often sees a job with a logo on it. If the business needs you to run, the buyer pays less. Here is how to see that before the buyer does.

Buyers are not buying a job

Quiet Light names four pillars of value: growth, risk, transferability and documentation. Transferability asks one thing. Can the business run without you? If the answer is no, that pillar is weak and the multiple moves down.

What the market pays by size

The IBBA and M&A Source Market Pulse for Q2 2026 gives median multiples by deal size. The survey covers 255 brokers and advisors and 181 closed deals in the quarter. These are market medians, not a quote on your business.

Look at the jump. Part of it is size. Part of it is a change in what is being counted. SDE means seller's discretionary earnings. It is profit plus the owner's pay and perks. EBITDA means earnings before interest, taxes, depreciation and amortization, with a manager already paid. Under about $2 million, buyers use SDE. From $2 million up, they use EBITDA. Do not multiply SDE by an EBITDA multiple.

An owner who is still the manager sits on the SDE side of that line. The business has to prove it can pay a manager and still make money.

Tests a buyer will run

• Owner hours. Mike Begg's checklist fails a deal if the owner works more than 20 hours a week with no team to absorb it.
• An org chart with the owner removed. Who does each job?
• Written steps for the work. If it only lives in your head, a buyer prices it as a job with inventory attached.
• Accounts in the company's name, not yours.

Concentration looks the same

Owner-dependence has a cousin. It is concentration. eComSwap says one customer at 20% of revenue is a common flag. Mike Begg's checklist fails one channel above 90% of revenue or one product above 70%. Creator businesses show the same pattern with the face, the email list and the top three affiliates.

Why the jump is a good sign

The table is not a trap. It shows what buyers reward. A buyer pays more when the earnings already include a paid manager, because the buyer does not have to fill your seat. Every hour you take out of the business moves you a little closer to the higher rows. You cannot change your size in a year. You can change how much the business leans on you.

FE International shows the same pattern for ecommerce. It puts owner-operated stores at about 2.0 to 4.0 times SDE. It puts established brands with a management team at about 3.0 to 6.0 times EBITDA.

What to do with twelve months

• Write down how the work gets done.
• Move logins and accounts into the company.
• Put a second person on every key relationship.
• Rebuild your P&L from the source reports.
• Cut the hours the business needs from you, week by week.

Start earlier than you think

FE International and Eightx both tell ecommerce owners to start 18 to 24 months before they want to close. Buyers want to see the business run without you for a while. A single good quarter does not show that.

To score your own business, read the exit-readiness checklist.