Don't buy a small business without reading about Key Employees!!!

professional profile

April 23, 2025

by a professional in New York, NY, USA

One key employee should not control your entire business I worked on a deal for a $5 million company. Everything looked solid until we asked one question. What happens if your manager quits? The owner had no answer. Nothing was written down. No backup plan. That risk scared the buyer. The deal nearly died. If one person walks and your business falls apart, your valuation drops fast. Want to make your business more valuable? Document key processes Cross-train your team Make sure no one person holds the entire operation together Buyers pay for systems, not for risk. Email me at redacted for your next acquisition
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Reply by a professional
in Charlotte, NC, USA
Buyers buy systems - like that Caleb.
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Reply by a searcher
in Los Angeles, CA, USA
When we acquired Autobody News in late 2023, the former owner was also selling to some Tier 1 accounts. We homed in on this potential risk, worked through the options and decided there wasn't key man risk around that role, and we could hire a replacement. We did, and it worked out. But it could have really been a major issue if we didn't due diligence that aspect.
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