When Co-Owners Score the Same Business Differently

A score gap between co-owners happens when two people who own the same business take the same assessment and describe two different companies. The gap shows each owner looking at the business from their own seat, and the difference between those views is some of the most useful information a transition plan can have.

A Case That Made Us Look Closer

A junior partner in a two-partner consulting firm recently took our Transferable Value Index. The score placed the firm as an owner-dependent success, about 50 out of 100. Business durability was fairly strong at 20 out of 30. Owner independence was low, at 11 out of 30.

What caught our attention was who took it. The junior partner scored the firm as an owner-dependent success. The founding partner had not taken the Index, and our guess was that the founder would have scored the same firm as far more transferable.

We had seen the same pattern inside our own firm. When our partners took the Index, the founder scored the firm as a transferable enterprise, while two other partners scored it as owner-dependent. Their scores matched each other closely. They differed from his.

Why Each Owner Scores From Their Own Seat

The Index asks each person about their own role. How much does the business depend on you to bring in new business, for example.

An operations partner who is not involved in business development will answer honestly that the business does not depend on them for new work. The business may still depend heavily on someone for new work: the other partner. Unless the question is framed from the company's point of view, one owner's low dependence can hide the other owner's high dependence.

For partners, a more revealing version of the question asks how much new business relies on your partner, or on anyone who will not be there after a transition. In a sale of a company with two owners, a buyer evaluates each owner's role and how it contributes to value. If one partner is expected to stay on as an employee after the sale, the business can keep what that partner carries. If both plan to leave, whatever either of them carries leaves too, and the score should reflect it.

Perspective pulls scores apart too. An owner who is confident in the team may see people ready to build new relationships, grow the business, and carry the key accounts. A partner who works closer to those relationships may see no one ready to step into them yet. That is a real disagreement about bench strength, and it matters more than any single score.

Pessimists, Optimists, and the Same Information

Even with identical information, two owners can land in different places because of temperament. One is pessimistic about the team's ability to run the operation. The other is confident.

We saw this in a family business sale. The founding father did not believe the business could run without him. His son, who had been running more and more of it, was confident it could, and he saw the operation as depending on himself. The customer base had become more diversified over time, which the founder acknowledged. Operationally, though, he had not let go of many of the things he believed depended on him.

The acquirer worked it out in diligence and saw what we had seen: the son was running the business. The founder moved into a largely ceremonial role, and the son received the keys, along with the equity that came with running the company forward. The buyer wanted him to have a real stake in the outcome, and the incentive program for his management team was designed as part of the transaction. What looked like a risk from the father's chair turned out to be a strength once someone looked at it from outside. Families weighing whether to sell or gift the business to their children benefit from that outside look early.

An outside advisor, with no stake in either chair, can test those two readings before a family commits to a path.

What Different Seats Mean in a Deal

In a recent third-party sale, ownership was split 90/10. The majority owner planned to step away within twelve to eighteen months after closing, and the buyer was comfortable with that. The minority owner, a key employee in his early forties, rolled his equity into the buyer and is expected to stay through the buyer's next sale, likely three to five years out.

Asked the same questions about how much the business depended on them, those two owners would have answered differently. The majority owner saw a company with a sales team and diversified customers. The minority owner saw it from a different chair, one much closer to the day-to-day work. The buyer planned around both: a defined handoff for one owner and a longer runway, with equity, for the other.

That deal also shows how equity can make a business more transferable. The minority owner's stake before the sale, and his rollover afterward, gave him a direct share in the value he would help build under the new owner. We explain the reasoning in the equity plan that makes your business worth more.

Why Every Owner's View Belongs in the Room

The purpose of the Index is to reveal the conditions an owner should work on with a coach or advisor to make the business more transferable to a buyer, whether that buyer is the management team or an outside firm. For a business with more than one owner, one person's answers are not enough to see those conditions in full. Unless there is a sole owner, we want the view of every person who will be part of a deal before we assess the risks or talk about a path. That includes minority owners and, often, the senior leaders expected to run the business afterward.

We have also talked about how the Index could handle partnerships better. One refinement we have discussed is asking, before the questions begin, whether the respondent is a sole owner, a majority owner, or a minority owner. That simple question would make the scores easier to interpret and the gaps easier to see.

Co-owners should settle how they will handle the difficult scenarios while they still agree on them. A partnership buy-sell agreement is the usual starting point, and our overview of buy-sell agreements explains how those documents protect each owner's family and the business.

When a Gap Becomes Friction

A score gap left unexamined can turn into friction. If one partner believes the business is ready to transfer and the other does not, they will disagree about timing, price, and what needs to change first. They may also disagree about who deserves credit for the value already built.

Change carries its own risk. We know of a business that decided to move from a project-based model to recurring maintenance work. Its long-tenured operations leader, with the company for more than twenty years, resisted the change. When he finally left, he took about ten technicians with him. The company had to rebuild, and it did, with new energy behind the new model and no remaining resistance.

We have made a similar shift inside our own firm, toward a more consistent and repeatable way of serving clients, and having an outside facilitator hold us accountable made the change easier to sustain. When a business tolerates a pattern for long enough, its people come to depend on it. Real change can mean losing some of them, and owners who want the change need to be ready for that. Partners who have already surfaced their differences are in a much better position to make those calls together.

How to Use the Gap

If you share ownership, try this:

• Have every owner take the Index. Include minority owners and the leaders expected to run the business afterward.
• Compare the answers question by question, not only the totals. Two owners can reach similar totals with different answers underneath.
• Talk through the biggest gaps. Each one is a question about roles, relationships, or bench strength that the owners have not yet answered together.
• Bring in an outside view if the conversation stalls. A coach or advisor can help owners see the business the way a buyer or successor will.

The gaps point to exactly the areas a buyer or successor will examine most closely. The first issue of the Index looked at the order in which owners let go of the parts of their business, which is a useful lens for reading those gaps. Closing the ones about bench strength usually comes down to leadership development ahead of succession.

We discussed this case on the first episode of our podcast, What Transfers.