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E-mailThe McFarland Group has released the first findings from its Transferable Value Index, a twelve-question assessment measuring how a closely held business performs without its owner present. Among all respondents, one question scores lower than any other: who decides what the business does next.
That question averages 2.94 on a five-point scale - the only one of the twelve to fall below 3.0. The gap to the next lowest question is substantial: customer diversification, the second-lowest scorer, averages 3.23.
The pattern persists even among owners who have made measurable progress. Within the Index's highest-scoring bracket - businesses the firm classifies as Transferable Enterprises - owners score 4.58 on client relationships and 4.12 on closing new business, while the question of setting strategic direction still trails at 3.30.
The data also challenges a common assumption about owner dependence. Thirty-three of the 52 businesses assessed score well on both dimensions the transferable value index measures, and only nine fall short on business durability. The strain concentrates almost entirely on the independence side, and within that category, on a single question. Among the 30 highest-scoring businesses in the cohort, 18 still have the owner alone deciding what the company pursues next.
"Owners do let go, and that surprises people," said Byron McFarland, founding principal of The McFarland Group. "What the data shows is that letting go happens in an order. Operations go first. Relationships follow. The decision about where the company is headed is the one an owner holds onto longest, and it is the one that most determines what the business is worth without them."
The finding carries direct implications for business valuation. Buyers, lenders, and successors evaluate how much of a company's forward direction depends on a single individual, and that evaluation shapes price, deal structure, and what a lender is willing to underwrite. A closely held business that can only determine its next move when the owner is in the room carries a discount that no diligence process overlooks.
McFarland's full letter, "The Last Thing You Let Go Of," along with the complete findings, the twelve-question breakdown, and the methodology, is published as the inaugural issue of the Index and available to download without a form at themcfarlandgroup.com.
The Transferable Value Index is available at no cost at transferablevalueindex.com. It scores a business across two dimensions - how durably it is built and how independently it operates - and returns a personalized report placing the company in one of four categories. The McFarland Group intends to publish findings from the Index on a continuing basis as the response set grows.
The findings reflect 52 assessments submitted to the Transferable Value Index through July 9, 2026, with duplicate submissions counted once. Responses from The McFarland Group personnel were excluded. The Index scores twelve questions across two dimensions, Business Durability and Owner Independence, each on a five-point scale.
About The McFarland Group
The McFarland Group is an advisory firm based in Omaha, Nebraska, founded by Byron McFarland. The firm has guided more than $3 billion in business value through more than 200 ownership transitions over two decades. It works with owners of closely held businesses on M&A advisory, selling a business to management, and performance equity compensation for key leaders. The firm's guiding idea is simple: Go Boldly. Learn more at themcfarlandgroup.com.
About the Transferable Value Index
The Transferable Value Index is The McFarland Group's ongoing measure of how closely held businesses hold up without their owners. Twelve questions score a company on structural durability and operator independence and place it in one of four categories. The assessment is free and takes about four minutes. Learn more at transferablevalueindex.com.
Media contact: Alex McFarland · [email protected] · 402-891-2300
