One in six closely held businesses that score high on durability still depends heavily on their owners, according to the second issue of the Transferable Value Index published by The McFarland Group. The quarterly measure, based on 121 assessments submitted from May through September 2026, evaluates businesses on two dimensions: Business Durability and Owner Independence. The findings highlight a critical blind spot for owners preparing to exit: a company can be built to last yet still run through its owner.
The Index scores each business on Business Durability, which covers earnings consistency, customer diversification, financial visibility, systems, workforce and resilience to disruption, and on Owner Independence, which assesses whether new business, client relationships, operations, direction, financial decisions and people decisions rely on one person. Across the cohort, the two dimensions correlate at 0.57, sharing about a third of their variation. This means a business can grow sturdier without becoming less owner-centric.
Nineteen of the 121 businesses, or roughly one in six, fall into the Owner-Dependent Success category. These companies score close to the top bracket on durability (20.5 versus 22.0 out of 30) but trail it by eight points on independence (14.6 versus 22.8). The sharpest divide is over people decisions. Six in ten owners say their team closes most new business and holds customer relationships, but fewer than half say their managers handle hiring, pay and terminations for their own teams. Twenty-two percent of owners remain personally involved in most people decisions, down to front-line roles—no other question draws as many owners to its most hands-on answer.
That single question tracks closely with overall performance. Where managers make their own teams' people decisions, businesses average 74 out of 100 on the other eleven questions, and none falls in the Owner-Run category. Where the owner stays personally involved, the average drops to 56 and nearly half are Owner-Run. Among Owner-Dependent Success businesses, 68 percent of owners remain personally involved in people decisions, compared with 10 percent in the top bracket.
“Building a durable business rewards involvement: your judgment, your relationships, your standards, stamped on everything,” said Byron McFarland, Founder of The McFarland Group. “Building an independent one requires the opposite: removing your judgment, your relationships, your standards from the machinery, one piece at a time, on purpose. Nobody does the second by accident. You have to mean it.”
The finding carries into a sale. In due diligence, a buyer asks who handles terminations because the answer shows where responsibility sits. When the answer is still the owner, the leadership team has never made the hardest call in the building. The issue's recommendation for most owners is to start with people decisions and hand them to the managers who will own them after the ownership transition. As in the inaugural issue, the question of who decides what the business does next scores lowest of the twelve on average, at 2.78 on a five-point scale.
The full issue, including McFarland's letter, a map of all 121 businesses and the complete question-by-question breakdown, is free to download without a form at https://www.themcfarlandgroup.com/blog/a-good-business-that-still-runs-through-you. The Transferable Value Index assessment is free at transferablevalueindex.com. It takes about four minutes and returns a score on both dimensions and a placement in one of four categories.
