The McFarland Group has released the first findings from its Transferable Value Index, a twelve-question assessment designed to measure how a closely held business would perform without its owner in place. Among all respondents, one question consistently scores lower than the rest: who determines what the business pursues next. That question averages 2.94 on a five-point scale – the only one of the twelve to fall below 3.0. The margin to the next lowest question is notable: customer diversification, the second-lowest scorer, averages 3.23.
The pattern persists even among businesses that have made the most progress. In the Index's highest-scoring category, which the firm classifies as Transferable Enterprises, owners score 4.58 on client relationships and 4.12 on closing new business. Yet the question of setting strategic direction still lags at 3.30, trailing both measures by a wide margin.
The data also challenges a common assumption about owner dependence in closely held businesses. Of the 52 businesses assessed, 33 score well on both dimensions the Index tracks, and only nine fall short on business durability. The strain concentrates almost entirely on the independence dimension – and within that, on a single question. Among the 30 highest-scoring businesses in the cohort, 18 still have the owner as the sole decision-maker on company direction.
"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 prepared to underwrite. A business that can only determine its next move when the owner is present carries a discount that surfaces in every diligence process.
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 is 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 plans to publish findings from the Index on a continuing basis as the response set expands.
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.
