How to value an online business that depends on its owner

"Owner-dependent" covers two problems that are priced in different places, and it is worth separating them before anything else:

• Labour you can replace. The owner spends hours on tasks someone else could do — writing, fulfilment, support, bookkeeping. That is a cost the stated profit usually leaves out, and it belongs in the earnings figure. It is the subject of seller's discretionary earnings and SDE vs EBITDA.
• Something you cannot buy. The audience follows the person, a client stays because of the relationship, the product works because only the seller understands it. That part of the profit may simply not transfer, however many hours you are willing to put in.

The first lowers the profit you are buying. The second puts a question mark over whether you are buying it at all.

Ask what the seller does each week and how long each task takes, in writing. Then cost the hours at what you would actually pay someone to do them — or at what your own time is worth to you, if you plan to do them yourself — and take that from the stated profit before applying any multiple.

None of this makes the business a bad purchase — a buyer who wants the job may be happy to pay for one. It makes it a different purchase, and the price should say which one it is.

The harder part is the earnings that rest on who the owner is. Common signs:

• A personal brand. The newsletter is signed by the seller, the channel shows their face, the social accounts are in their name. Readers who subscribed to a person may not stay for a stranger.
• Client relationships. Service-like revenue — retainers, custom work, a few large customers — often follows the person who sold it. Ask how each client was won and whether they know a sale is happening.
• Knowledge nobody wrote down. A codebase only the seller understands, supplier terms agreed by phone, a process that lives in their head. If it is not documented, you are buying it on their goodwill.
• Accounts tied to the person. Payment processors, ad accounts, marketplace seller accounts and affiliate memberships are sometimes held in a personal name and cannot simply be moved. Which assets transfer, and how, is covered in transferring an online business after the sale.
• Platform standing earned by the seller. A rating, a verified status or a programme membership granted to the seller may not carry over. See platform dependence and online business value.

For each one, the useful question is not "is the owner important?" but "what share of revenue would I expect to lose in the first year without them, and why?" Write a number down. If you cannot, ask the seller to help you estimate it — how they answer is informative too.

A lower multiple is the bluntest response, and often not the best one. When the risk is that something does not transfer, terms can put the cost of that risk on the person who knows most about it:

• A paid transition period. The seller introduces you to clients and audience, hands over processes and stays reachable for an agreed number of weeks.
• Part of the price deferred. Some of the money is paid later, conditional on revenue holding through the handover. If the earnings were the seller's, the seller shares the loss when they leave.
• Documentation as a condition of closing. Written processes, supplier contacts and credentials listed in the agreement, rather than promised afterwards.
• An agreement not to compete or solicit. A seller whose name built the audience can rebuild it next door. Whether such a clause is enforceable, and on what terms, depends on where you both are — take advice on the wording.

Any deferred or contingent payment changes what the headline number means; see what a headline sale price includes and how to make an offer.

Each sale in our database carries one stated annual profit and one stated annual revenue figure, as the listing reported them, alongside the sold price. We do not record the seller's weekly hours, whether the business carried a personal brand, or whether the stated profit was before or after paying for the owner's time — listings at this size rarely say, so we have no basis to adjust for it, and we publish no "owner-dependence discount".

What the table does let you do is compare scale. Set the median stated annual profit for your category against what the owner's hours would cost to replace. Where the two are close, the median sale in that category is pricing a job as much as a business, and the sold prices should be read that way.

The first two columns cover every non-demo sold deal of that type with a stated profit. The last two are measured over the paid report's window — the most recent 200 priced sales of that type — on the profit basis, so they can rest on a smaller sample. A dash means we hold fewer than five comparables on that basis and publish nothing.