Definition
Owner Dependency
The degree to which a business relies on its current owner to function.
Definition
Owner dependency measures how much risk is created by the current owner's departure. High owner dependency means the business may lose key relationships, institutional knowledge, or operational ability when ownership changes. BizBuyScore assesses owner dependency through five yes/no questions covering customer relationships, operational involvement, SOPs, staff retention, and critical skills or licences.
Worked Example
A law firm where the principal handles all client relationships, has no documented processes, and holds the key professional licences would score high on owner dependency — a significant acquisition risk even if the financials are strong.
Related Terms
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