New Index Reveals Owner Dependence Hinges on People Decisions

The McFarland Group has released the second issue of its Transferable Value Index, a quarterly measure of how closely held businesses hold up without their owners. The issue, titled “A Good Business That Still Runs Through You,” analyzes 121 assessments submitted between May and September 2026 and opens with a letter from Founder Byron McFarland. The Index scores businesses on two dimensions: Business Durability, which covers earnings consistency, customer diversification, financial visibility, systems, workforce and resilience to disruption; and Owner Independence, which assesses whether new business, client relationships, operations, direction, financial decisions and people decisions depend on one person. Across the cohort, the two dimensions correlate at 0.57, meaning they share about a third of their variation—so a business can become much sturdier while its owner remains just as central.

One in six businesses (19 of 121) falls into the Owner-Dependent Success category, scoring near the top bracket on durability (20.5 vs. 22.0 out of 30) but trailing by eight points on independence (14.6 vs. 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 managers handle hiring, pay and terminations for their own teams, and 22 percent say they are personally involved in most people decisions, down to front-line roles. That single question tracks closely with the rest of the score: 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 is 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 recommends that most owners start with people decisions and hand them to the managers who will own them after the ownership transition. 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.