Equity Value Enhancement

Chapter 11Putting It All Together—Four Vignettes

The intention of this book is not to simply impress the reader on what a thoughtful business valuation advisor or strategic value architect should look like. Rather, it is to stress that companies are confronted with the need to be dynamic and to have a strategy that allows the creation of enhanced value for shareholders. This requires leverage of both financial and human capital.

Focus by management, ownership, and advisors tends to be on revenues and profits (top and bottom line), which provide the economic benefit. Arguably, this benefit is more easily tracked. However, it is capital appreciation (growth) that most investors seek. Higher price multiples are the result of better-than-industry growth and reduction of operating risks. Therefore, each stakeholder needs to think like both a Main Street and a Wall Street investor who identifies, measures, manages, and mitigates risks.

Such activities may be lacking in large part as the concept of leveraging intangibles like governance, relationships, risks, and knowledge seems ethereal. Words like strategy are understood and spoken, but their application challenges many far wiser than the author. This is why solutions lie not within one individual, but within many. The challenge tends not to be persistance, passion, and purpose. Rather, it tends to be addressing resource gaps and not knowing where or how to start. The vignettes that follow provide some applications of these ideas. ...