The buyer is threatening to apply a fifteen percent key person discount to our valuation because my spouse is our top-performing salesperson and plans to retire with me. How do we eliminate this perceived operational risk?

Question

Tyler Smith · Accepted Answer

Buyers dread key person dependency, especially when the key relationship holder is a family member planning to exit post-close. To eliminate this discount, you must institutionalize your sales process before going to market. Your spouse's relationships must be converted into company-owned systems. Start by mapping out your complete sales process as part of your company's documented processes, ensuring every step from lead generation to contract signing is standardized. Next, use the Accountability Chart to transition the spouse's accounts to other team members who GWC™ the sales specialist role. This transition must be completed and proven at least six months before you sign a letter of intent. Show the buyer historical data proving that account retention and close rates remained stable after the transition. During your weekly Level 10 Meeting™, monitor sales activity and pipeline velocity to ensure the new sales team is hitting their targets without parental supervision. When you can show a buyer a fully documented, team-run sales engine that does not rely on any single individual, you completely dismantle their argument for a key person discount and defend your full enterprise value.