Selling a business
What Are Your Company’s Weaknesses?
The five weaknesses that cost owners most at sale time, how buyers react to each, and how long each takes to reduce.
By Michael D. Rubin, CEO & Founder · Updated September 2026 · 731 words
The weaknesses that cost owners most at sale time are an owner the company cannot run without, dependence on one or two customers, reliance on a single product or service, a shrinking market and a skilled workforce close to retirement. Two companies with the same revenue and profit can sell for very different prices because of these, and most can be reduced, if not removed, with enough lead time.
Every company has weaknesses. Buyers know that. What they price is how serious each one is, whether the owner has noticed it and what has been done about it.
The test is what happens when you step away
A useful test of any company is how it performs when the person at the top leaves. Many founder-led companies fail it. The founder built the key relationships, approves the major decisions and holds the technical knowledge, and nobody has been prepared to take over if something happened to them. To a buyer, that is less a company than a job with the founder's name on it.
Buyers respond in predictable ways: a lower price, a requirement that you stay for a long transition, or part of the price paid through an earnout tied to future results. Our answer on the discount buyers apply for owner dependence explains how that works. A board or advisory board, if you have one, can help you name a successor and give that person real authority well before a sale.
Five common weaknesses and how to reduce them
| Weakness | How buyers react | How to reduce it | Time needed |
|---|---|---|---|
| Owner dependence | Lower price, longer transition, earnout | Hire or promote a general manager and hand over key accounts | 12 to 24 months |
| Customer concentration | Discount, or price held back until the customer is retained | Win new accounts; sign longer agreements with the largest customers | A year or more |
| Single product or service | Worry that one shift in demand could cut earnings | Add related products or services existing customers already buy | A year or more |
| Declining market | Lower multiple and fewer interested buyers | Move toward growing segments and document the shift | Several years |
| Aging skilled workforce | Concern about who will run the equipment or crews | Apprenticeships, cross-training, equipment that reduces skill dependence | Ongoing |
Customer concentration is the one buyers ask about first
If one customer brings in a large share of revenue, a buyer immediately asks what happens if that customer leaves after closing. Founders often built those relationships personally over many years, which makes them harder to transfer to a new owner. There is no universal cutoff, but the larger the share, the more of the price a buyer will try to hold back or make contingent on the customer staying.
Winning new customers takes time and money, which is exactly why it should begin well before a sale. Moving the relationship with your largest accounts from you to a team, with regular contact from managers and service staff, helps too. Our answer on how customer concentration affects valuation shows how buyers price it.
Markets change, and buyers want proof you can change with them
A company in a declining market can still sell well if it has shown it can move. Buyers look for evidence: new products introduced, new customer groups served and a rising share of revenue from growing lines. The same logic applies to a single-product company. Adding what your existing customers already buy elsewhere is usually the cheapest way to diversify, because the relationship and the sales channel already exist.
In skilled trades and manufacturing, a credible plan for replacing retiring workers answers one of the first questions a buyer asks on a site visit. Training programs, apprenticeships, documented procedures and equipment that reduces reliance on rare skills all count. No buyer wants to own machines that nobody left in the building knows how to run.
Where MDR & Associates fits
Reducing weaknesses pays off whether you sell soon or keep the company for years. MDR & Associates identifies them in the free discovery meeting, when we review three years of financials, and our pre-exit consulting covers the 12 to 24 months before a sale for owners who want to fix them first. If you need a formal, defensible number along the way, a third-party business valuation is available separately. To find out which weaknesses matter most in your company, contact us for a confidential conversation.
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Questions owners ask next
Should I disclose weaknesses I cannot fix?
Yes, early and with context. Buyers find most issues in due diligence anyway, and a problem they discover on their own damages trust and invites a price cut. Disclosed early, with the steps you have taken, the same weakness is usually priced once and then set aside.
Can an earnout make up for a weakness?
Sometimes. An earnout pays part of the price later if the business hits agreed targets, so it can bridge a gap when a buyer doubts earnings will hold. It also shifts risk to you, because payment depends on results after you no longer control the company.