The Problem With a Personal Brand

The Downside of Building a Personal Brand

These days, building and curating a personal brand online is often portrayed as a key to success. Entrepreneurs are told to put themselves at the forefront, to be the face of their business, and to leverage social media to grow both their influence and their company. However, the team at Value Builder sees things differently. Data gathered from over 80,000 business owners paints a compelling picture: businesses that rely heavily on their owners’ personal brands are worth less and harder to sell.

The Hub & Spoke Model: A Major Valuation Issue

The core insight that Value Builder offers business owners is the concept of the "Hub & Spoke" model. In this model, the business is highly dependent on its founder—the “hub”—to drive sales, make decisions, and maintain relationships. The “spokes” are the employees, customers, and partners who rely on the owner to keep things running smoothly.

While this might seem like a natural structure for many small businesses, it creates a major challenge when it comes time to sell. In businesses where the founder is at the centre of everything, buyers see a higher risk. If the owner leaves, the whole business can collapse, and that risk is priced into any offer.

The Data Behind the Valuation Gap

At Value Builder, the team has analysed data from over 80,000 companies through a detailed questionnaire. Business owners share financial performance, day-to-day operations, and their level of involvement in the business. The result? The average offer for a business where the owner is highly involved - the "Hub & Spoke" model - is just 2.9 times the company's pre-tax profit.

For comparison, businesses that are less reliant on the owner -those with strong management teams, well-documented processes, and a brand independent of the founder - fetch an average of 3.9 times pre-tax profit. The gap is significant: 1 full turn of profit is lost simply because the business is dependent on the founder.

The Impact of Personal Branding on Business Value

Now, let’s consider the role of personal branding in this equation. Entrepreneurs who invest heavily in building their personal brand create businesses that are even more closely tied to them as individuals. Think about high-profile entrepreneurs who are the face of their company on social media and in public appearances. The danger is that when the personal brand becomes synonymous with the business, the value of the company is tied to the owner’s continued presence.

Buyers recognise this risk. If the business cannot function without the founder at the centre, the sale price is lower. In many cases, an acquirer will demand a longer earn-out period or an equity rollover to ensure the owner sticks around post-sale. Instead of a clean exit, the owner is tied to the business for years, effectively trading one set of demands for another.

The Emotional Cost of a Personal Brand

Building a personal brand also has high emotional costs. To succeed, owners must live in an online world where everything appears polished, glamorous, and often unrealistic. Feeds are full of perfect lives, luxury cars, and seemingly effortless success. For many entrepreneurs, this can create a sense of inadequacy and disconnection from what truly matters—running a business, creating value, and enjoying personal freedom.

The constant need to maintain an online persona can be exhausting. Founders find themselves spending more time feeding the content machine than focusing on growing their business or planning their endgame. Over time, this lifestyle detracts from their ability to build a business that can run without them.

A Smarter Path: Building a Business That Thrives Without You

The most successful founders know that the key to a valuable business is not their personal brand, but the systems, people, and processes that exist independent of them. They focus on building a business that can run without them at the helm, with strong leadership, clear processes, and a brand that doesn’t rely on the owner.