Practical guide to making your company less dependent on the owner (and ready for M&A)

When considering a future sale, it is essential to assess how attractive your company is to potential buyers. One of the factors that most influences that attraction—and the final price—is the business's dependence on the owner. Companies that operate smoothly without relying on a single person, especially the founder, tend to achieve higher valuations and attract more interested parties.

This article proposes practical steps to educe owner dependency, build a strong management team and comunicar con eficacia the process to the team, so that the business gains stability and value before entering into an M&A process.

Reduce owner dependency

Many companies rely excessively on their owner for decisions, business relationships, or day-to-day operations. This dependence reduces market value and limits the pool of buyers, but there are certain actions that help make the business more independent and, therefore, more attractive to investors:

• Build a capable management team: surround yourself with professionals who can take on key responsibilities. Delegating critical tasks conveys to buyers that the company can operate normally after the transition.
• Implement scalable systems: standardize processes and workflows that don’t require your constant oversight. Repeatable systems make growth and continuity easier with the next owner.
• Document operations: write down processes, decision criteria, and day-to-day activities. A well-documented company is easier to evaluate and transfer.
• Automate with technology: use tools to automate routine tasks (financial reporting, sales follow-up, customer service). Automation reduces errors and dependence on specific individuals.
• Simplify management: avoid complex structures that slow down decisions. The clearer the organization, the easier it is for new leadership to take over.

By reducing your operational role, you increase value and decrease buyers’ perceived risk. A company less dependent on the owner is seen as more stable and attractive in the market.

Build a strong management team

A strong management team underpins operational independence and is a key asset in buyers’ eyes. It demonstrates continuity, reduces transition risks, and eases day-to-day operations after closing. To build it:

• Delegate responsibility and authority: prevent decisions from concentrating in one person, especially the owner. Distributing authority improves resilience and confidence in the company’s stability.
• Bring in experienced talent: hire professionals with relevant skills and track records. The leadership team’s experience adds credibility with buyers.
• Design retention plans: stay-on incentives, milestone-linked bonuses or, where appropriate, participation schemes help ensure key talent remains during and after the sale.
• Depersonalize critical relationships: build commercial and institutional relationships that outlive the owner. Formalize and share contacts and processes so they can transfer smoothly.
• Secure agreements with key employees: use appropriate contracts and commitments to reduce turnover in sensitive phases, reinforcing operational continuity.

A robust team reduces one of the most common deal-breakers: the departure of key people. The result is a more autonomous business that’s easier to transfer.

When should you inform employees about a potential sale?

There are two recommended approaches, and both can be valid depending on the context:

Option 1: Inform early. It gives people time to absorb the change and supports an orderly transition. It works well when the relationship with the team is strong and transparency helps retain talent.
Option 2: Inform later. It minimizes day-to-day disruptions and reduces the risk of uncertainty. It’s useful when confidentiality is a priority or when early disclosure could affect productivity.

Whichever approach you take, consider the following:

• Inform key team members first: start with staff who are critical to the business’s success. Selective disclosure helps prepare the transition and ensures key people are aligned with company goals.
• Use non-disclosure agreements (NDAs): protect the confidentiality of the deal by having employees sign NDAs. This helps control sensitive information and reduces leak risk.
• Communicate positively: frame the potential transaction as an opportunity for growth and professionalization, highlighting benefits and continuity.
• Prepare answers to common questions: the team will ask about job stability, roles, conditions, and next steps. Anticipate clear answers that maintain motivation.

The right timing depends largely on company size, the relationship between owner and management, and the team’s role after the transaction. Balancing transparency and timing is key to maintaining focus and trust.

Conclusion: why make the company less dependent on the owner

Selling a company is a complex process that preparation to maximize value. By reducing owner dependency, strengthening the management team, and carefully planning internal communication, you increase attractiveness and reduce transition risks. These steps reinforce the business and make for a smoother, more favorable M&A process.
If you’re considering a sale, start by implementing these measures: your company will be more resilient, more predictable, and ultimately more valuable to a potential buyer.

We recently discussed this topic in a webinar. Below is an explanatory video with the most relevant points.