Why Most Profitable Businesses Never Sell: My Conversation with Jason Duncan
A profitable business isn’t necessarily a sellable business. That sounds counterintuitive until you’ve spent enough time around business sales.
I recently joined Jason Duncan on The Real Jason Duncan Podcast to talk about the difference between building a successful company and building one that someone else can actually own.
It’s a distinction I learned the hard way.
Years ago, I’d built a highly profitable company doing more than $1 million in EBITDA. When a private equity group approached me, I assumed that success would translate naturally into a strong exit.
Instead, the offer came with a three-year earnout.
The problem wasn’t profitability. The problem was that too much of the company still depended on me.
I walked away from that deal, spent the next three years making myself increasingly unnecessary to the business, and eventually sold the company for eight figures.
Jason and I spent a good part of this conversation discussing what changed over those three years—and why owner dependence is one of the biggest obstacles I see when otherwise good businesses come to market.
We also got into the Kidnap Test from Sweat Equity Payday: what happens to your business if you disappear for a day? A week? A month? A quarter?
Who can sign checks? Who runs payroll? Who manages customers, vendors, employees, and problems when you’re not there?
If the answer is still you, the business may be producing excellent income while remaining difficult to transfer.
We also discussed earnouts, buyer retrading, customer and vendor concentration, clean financials, preparing a company before going to market, and why some owners discover far too late that what they’ve built is essentially a very valuable job.
A good business is the starting point. A transferable business is what gives you options when it’s time to leave.
At HartmannRhodes, we help owners understand what their businesses are worth, identify issues that may reduce value, prepare for the market, and navigate the transaction from initial planning through closing.
HartmannRhodes advises owners of companies typically valued between $1 million and $25 million. If you are considering selling within the next few years, we can provide a structured pre-sale valuation review and a readiness roadmap based on your company, timeline, and goals.
You only sell your business once. Make it count.
Mark Hartmann is a former business owner turned M&A advisor—and the author of Sweat Equity Payday—who knows firsthand what it takes to build, grow, and sell a successful company. A three-time Inc. 5000 CEO honoree, he led his own eight-figure sale and now helps business owners sell companies worth $1M to $25M. Mark understands that selling a business is personal, not just financial. That’s why he works closely with owners to maximize value, protect their legacy, and transition on their terms.
He holds an MBA from Eastern University and a master's degree in organizational change management from St. Elizabeth University, as well as Certified M&A Professional (CM&AP), Certified Business Intermediary (CBI), Certified Exit Planning Advisor (CEPA), and Certified Value Builder (CVB) credentials.
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HartmannRhodes advises owners of companies typically valued between $1–$25 million. If you’d like a structured pre-sale valuation review and a readiness roadmap, we can walk you through the process and tailor it to your timeline and goals. Contact us today!
Blog: Why Most Profitable Businesses Never Sell: My Conversation with Jason Duncan