Here, I explore history, mythology, and the deeper forces shaping our world — and how men and families can prepare for, and adapt to, these times of great change.
The key-person discount
Buyers have a price for the business owner's curse. They take it off the offer, when they'll buy at all.
The numbers are stark. In its 2023 survey of 1,162 US business owners, the Exit Planning Institute found 75% would like to exit within ten years, and it reckons the business is typically 80% or more of the owner's net worth. That's most of a family's future riding on one sale. And the question a buyer is really asking is whether the business is the owner. Take them out and the machine stops, and buyers know it. The trade calls the markdown a key-person discount, and the more a business leans on one person, the bigger it gets.
Here's the part worth sitting with. The work that removes the discount is exactly the work that makes the business calmer and more profitable today. Decisions with named homes. Ways of working written down. A leadership team that functions. Numbers anyone can read. None of it is exit planning. The exit is just the day the design gets tested, and most owners find out the result at precisely the wrong moment.
So build a business you could sell, even if you'd never sell it. Could-be-sold is the most honest definition of healthy a business has, and it hands you the one thing the curse takes away: options. Sell, step back, take the summer, start the second thing, or keep going by choice instead of by sentence.
The question to reply with: would yours sell without you in it? Answer honestly. The answer is the to-do list.
David
David Schofield · Purpose In Action
Purpose In Action Coaching & Consulting
Here, I explore history, mythology, and the deeper forces shaping our world — and how men and families can prepare for, and adapt to, these times of great change.
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