Most of us have watched the same thing discount a deal or kill it: the owner is the only person in the company who can close. The relationships are his. The forecast is his memory. Buyers see it in week one of diligence and they price it.
What’s odd is how rarely it gets scoped like the other detractors. Financials get a CPA. Structure gets an attorney. Customer concentration gets a plan. Owner-dependent revenue gets a line in the report and a suggestion to hire a VP of Sales — which the owner has usually tried once already, and it ended badly enough that he’s concluded it doesn’t work.
Part of the problem is that owners misdiagnose it themselves. Ask one and he’ll say he just needs more leads. Usually it’s something else:
Nobody owns going out and finding demand — growth is whatever walks in.
Demand arrives and drains out. Quotes unchased, follow-up dies, dormant accounts unworked.
They’re not in the room when the shortlist gets built; they hear about the job after it’s decided.
They win almost every time they’re in front of the right person, but nobody can say in advance who that is.
Different fixes, very different timelines. The second one can show results in 30-60 days. The third takes most of a year.
One question worth asking a client 18-36 months out: what happens to revenue if you stop selling personally for 90 days? The answer is more honest than the financials.
When owner-dependency shows up in your work, who ends up owning the fix?
Evan Newman
Fractional VP of Sales — Greensboro
