Copy of Four ways to protect your turf

A man is sitting at a table with a laptop and shaking hands with a man.

If you were to draw a picture that visually represents your role in your business, what would it look like? Are you at the top of a traditional Christmas-tree-like organizational chart, or are you stuck in the middle of your business, like a hub in a bicycle wheel? 


As anyone who has tried to fly United when O’Hare has been hit by a snowstorm knows, a hub-and-spoke model is only as strong as the hub. The moment the hub is overwhelmed, the entire system fails. Acquirers generally avoid hub-and-spoke managed businesses because they understand the dangers of buying a company too dependent on the owner. Here’s a list of nine warning signs you’re a hub-and-spoke owner and some suggestions for pulling yourself out of the middle of your business: 


1. You sign all of the checks 


Most business owners sign the checks, but what happens if you’re away for a couple of days and an important supplier needs to be paid? Consider giving an employee signing authority for checks up to an amount you’re comfortable with, and then change the mailing address on your bank statements so they are mailed to your home (not the office). That way, you can review all signed checks and make sure the privilege isn’t being abused. 


2. Your mobile phone bill is over $200 a month 


If your employees are out of their depth a lot, it will show up in your mobile phone bill because staff will be calling you to coach them through problems. Ask yourself if you’re hiring too many junior employees. Sometimes people with a couple of years of industry experience will be a lot more self-sufficient and only slightly more expensive than the greenhorns. Also consider getting a virtual assistant (VA), who can act as a first line of defense in protecting your time. You can find a VA by filling out the request for proposal at http://www.ivaa.org/. 


3. Your revenue is flat when compared to last year’s 


Flat revenue from one year to the next can be a sign you are a hub in a hub-and-spoke model. Like forcing water through a hose, you have only so much capacity. No matter how efficient you are, every business dependent on its owner reaches capacity at some point. Consider narrowing your product and service line by eliminating technically complex offers that require your personal involvement, and instead focus on selling fewer things to more people. 


4. Your vacations suck 


If you spend your vacations dispatching orders from your mobile, it’s time to cut the tether. Start by taking one day off and seeing how your company does without you. Build systems for failure points. Work up to a point where you can take a few weeks off without affecting your business. 


5. You spend more time negotiating than a union boss 


If you find yourself constantly having to get involved in approving discount requests from your customers, you are a hub. Consider giving front-line, customer-facing employees a band within which they have your approval to negotiate. You may also want to tie salespeople’s bonuses to gross margin for sales they generate so you’re rewarding their contribution to profit, not just chasing skinny margin deals. 


6. You close up every night 


If you’re the only one who knows the close-up routine in your business (count the cash, lock the doors, set the alarm), then you are very much a hub. Write an employee manual of basic procedures (close-up routine, e-mail footer to use, voice mail protocol) for your business and give it to new employees on their first day on the job. 


7. You know all of your customers by first name 


It’s good to have the pulse of your market, but knowing every single customer by first name can be a sign that you’re relying too heavily on your personal relationships being the glue that holds your business together. Consider replacing yourself as a rain maker by hiring a sales team, and as inefficient as it seems, have a trusted employee shadow you when you meet customers so over time your customers get used to dealing with someone else. 


8. You get the tickets 


Suppliers’ wooing you by sending you free tickets to sports events can be a sign that they see you as the key decision maker in your business for their offering. If you are the key contact for any of your suppliers, you will find yourself in the hub of your business when it comes time to negotiate terms. Consider appointing one of your trusted employees as the key contact for a major supplier and give that employee spending authority up to a limit you’re comfortable with. 


9. You get cc’d on more than five e-mails a day 


Employees, customers and suppliers constantly cc’ing you on e-mails can be a sign that they are looking for your tacit approval or that you have not made clear when you want to be involved in their work. Start by asking your employees to stop using the cc line in an e-mail; ask them to add you to the “to” line if you really must be made aware of something – and only if they need a specific action from you. 

Get Free Business Valuation

or

Schedule Free Consultation

Recent articles for you

By Kim Santos June 16, 2025
When Sean McAuliffe sold his company, he had a lot going for him. His distribution business was generating nearly $19 million in revenue. Margins were healthy. Growth was solid. And yet, when it came time to sell, his company was valued at around four times EBITDA, a relatively modest value for a $19 million company. The reason? Sean didn’t fully control his supply chain—and buyers noticed. Dependency Makes Buyers Nervous Sean’s model was simple. He bought car key fobs from suppliers in Asia and sold them to locksmiths across the U.S. It was a classic distribution play: source cheap, sell smart, and manage relationships. Sean executed well. He even created his own brand, Keyless to Go, and FCC-registered his products—moves that set him apart from competitors. But despite these efforts, Sean was still reliant on third-party suppliers. He didn’t own the factories. He didn’t control manufacturing. His business was exposed to the decisions of vendors half a world away. In today’s environment—where tariffs and geopolitical tensions can change the cost and availability of overseas goods almost overnight—relying on foreign suppliers feels riskier to acquirers than ever. This kind of dependency is exactly what The Value Builder System™ measures through the Switzerland Structure—one of the eight key drivers of company value. The Switzerland Structure assesses whether your business is overly dependent on any one customer, employee, or supplier. Buyers pay a premium for companies that aren’t beholden to any single relationship. Why Monopoly Control Drives Value Contrast that with businesses that own their brand, control their production, or have proprietary products. Companies with a defendable moat—what we call Monopoly Control—are 40% more likely to have received a written offer to acquire their business, according to analysis of more than 80,000 business owners who have completed their Value Builder Score report. When you control your product and customer experience, you influence your valuation upward—giving buyers fewer reasons to discount your business. The Takeaway for Owners Sean still built a great business. His execution created life-changing wealth. But if he had owned the supply chain or had exclusive manufacturing rights, he likely would have commanded a higher multiple.  The takeaway for business owners: Building a valuable company isn’t just about revenue and profit. It’s about creating a business that can thrive without being dependent on any one customer, employee, or supplier.
By Kim Santos April 21, 2025
Value Builder Analytics, drawing on proprietary data from over 80,000 business owners, found that companies that can run without the owner for at least three months are twice as likely to receive an acquisition offer above 6x EBITDA. The concept is simple. The execution? Not so much. Take Kristie Shifflette for example. She was an early master franchisee with Orangetheory Fitness, a one-hour, coach-led workout that uses heart rate zones to boost calorie burn during and after exercise. When she opened her first location, she did it all—marketing, hiring, payroll, and even handling construction headaches. It worked but only because she was working constantly. As she expanded, things started to break. With two locations, she was stretched. At three, it became clear: The model only worked when Kristie was the model. She knew she needed to change. Kristie stopped focusing on being in the business and started focusing on building the business. From Operator to Owner Kristie started documenting everything. From pre-sale processes to day-to-day studio operations, Kristie developed detailed playbooks that codified exactly how her Orangetheory locations should run—without her. She created a compensation structure for studio managers that gave them ownership over their results: modest base salaries paired with meaningful bonuses tied to net member growth and total revenue. Top-performing managers could double their pay, and they were treated like mini-CEOs with full responsibility for their studio’s performance. By the time she sold her business, Kristie had built a company with 13 locations generating well north of $10 million in annual revenue. Some of her top-performing studios, like the Chapel Hill location, were bringing in revenue of $2 million a year, with EBITDA margins around 40%.  Kristie’s story includes an important lesson: Make yourself less essential, and your business becomes more valuable. If you’re still the one opening the door in the morning and locking up at night—literally or metaphorically—it’s worth asking: What would break if I stepped away for 90 days? Start there. Whether it’s building a playbook, empowering your team, or simply learning to let go, taking even one step toward reducing your involvement makes your company not just more valuable but more enjoyable to own.
By Kim Santos April 14, 2025
For business owners considering their endgame, learning what makes a company valuable can feel overwhelming. Buyers prioritize factors like recurring revenue, a differentiated product or service, and a leadership team that operates independently from the owner. If a business doesn’t check every box, it can seem as though selling is perpetually just out of reach. But perfection is not a prerequisite for a sale. While improving the key drivers of value is important, an imperfect business can still be highly desirable to the right buyer. In fact, some acquirers actively look for businesses with fixable flaws because they see an opportunity to increase value. Blake Hutchison on Why Imperfections Can Be to an Acquirer’s Advantage Blake Hutchison, CEO of Flippa, has witnessed thousands of business acquisitions. Flippa is an online marketplace where business owners can buy and sell companies, particularly small to mid-sized digital businesses. The platform connects sellers with buyers looking for opportunities to grow or optimize an acquisition. In a recent Built to Sell Radio interview, Hutchison explained that many business owners assume their company won’t attract buyers because it has shortcomings. In reality, most acquirers aren’t looking for perfection—they’re looking for potential. Many buyers have a strategic advantage, whether it’s a strong distribution network, operational expertise, or access to capital, that allows them to take an imperfect business and make it more valuable. A prime example of this is the acquisition of PetCoach. How PetCoach Turned an Imperfection into a Selling Point PetCoach, co-founded by Brock Weatherup, was a two-sided marketplace designed to connect pet owners with veterinarians. The challenge for any marketplace business is keeping both sides in balance—generating enough demand from pet owners while ensuring there are enough veterinarians to meet that demand. PetCoach had built a strong product, but it lacked a broad distribution channel to acquire pet owners at scale. Without a solution, growth would remain limited. Instead of seeing this as a dealbreaker, Weatherup positioned it as an opportunity for the right buyer. That buyer was Petco. With more than 1,500 locations across the U.S., Mexico, and Puerto Rico, Petco had access to millions of pet owners. By acquiring PetCoach, Petco could instantly expand its offerings while solving PetCoach’s biggest challenge. Weatherup didn’t need to fix the scalability issue before selling. He needed to find an acquirer for whom the business’s weakness was actually a competitive advantage. Your Business Has Value—Even if It’s Not Perfect This doesn’t mean business owners should ignore the fundamentals of value creation. Strengthening factors like recurring revenue, customer retention, and operational efficiency will always increase a company’s attractiveness. However, not every issue needs to be resolved before an exit.  Instead of viewing imperfections as obstacles, business owners should consider how an acquirer might perceive them: A company struggling with customer acquisition may be a great fit for a buyer with an established customer base. A business with inefficient operations might attract an acquirer with expertise in streamlining processes. A company overly dependent on its owner could be appealing to a buyer with a strong leadership team ready to step in. As Blake Hutchison explains, acquirers are often looking for businesses where they can add value. The key is to position the company in a way that highlights its strengths while framing its imperfections as untapped potential. The right acquirer won’t see weaknesses as dealbreakers—they’ll see them as opportunities.