"New analysis published today (6 February 2026) reveals a structural issue that is eroding valuations, limiting exits, and trapping founders in their businesses, with around 80% of UK private companies failing to sell. The White Paper, The Owner Dependence Problem in UK SME Businesses, published by Exit Factor, highlights how excessive reliance on founders is undermining business value across the UK SME sector. The White Paper analyses businesses with annual revenues between £3m and £30m and demonstrates how owner dependence materially restricts strategic options for owners."
"Exit Factor's analysis shows that most owner-dependent businesses fail to sell and, of those that do, they typically achieve 20-40% lower valuations than comparable companies. The issue is not profitability, but perceived risk: buyers are unwilling to pay full value for a business that cannot operate independently of its founder."
"Too many owners assume that strong revenue automatically translates into strong value. This White Paper shows why that isn't true. If a business depends on the owner to make decisions, manage relationships, and keep operations moving, buyers see fragility, not strength. Owner dependence is one of the biggest, and most avoidable, destroyers of value we encounter."
A structural owner dependence problem is eroding valuations, limiting exits, and trapping founders, with around 80% of UK private companies failing to sell. Owner reliance materially restricts strategic options for businesses with £3m–£30m revenue. Owner-dependent businesses that do sell typically achieve 20–40% lower valuations than comparable companies. The issue is perceived risk rather than profitability, as buyers discount firms that cannot operate independently of their founders. Owner dependence commonly develops as complexity increases while formal management structures lag, leaving founders central to customers, suppliers, and key decisions.
Read at London Business News | Londonlovesbusiness.com
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