Value Maps: Valuation Tools That Unlock Business Wealth
Valuing non-public companies is about more than numbers. That is because most closely held companies face no shareholder mandate to maximize profit. Without such pressure, a private company can pursue other objectives, including tax minimization.
Without the goal of profit maximization, unusual performance metrics stand out when compared to industry composites of public companies. These measures may exceed those in a composite; more often, they trail it. In either case, though, the question is "Why?" To answer it, analysts must uncover underlying cause-and-effect relationships. Those dyads frame the analysis of how a firm creates value or why it doesn't. Private-equity analysts need tools to spot such relationships, gauge why value is or isn't created, and assess the durability of value-creating mechanisms. Because of the difference in incentives between most publics and most privates, traditional tools from finance are no help.
In his book Value Maps: Valuation Tools That Unlock Business Wealth, author, speaker, and valuation expert Warren Miller explains how to guide client companies through self-assessment using the five-dimension SPARC FrameworkSM: Strategy, People, Architecture, Routines, Culture. This framework helps analysts uncover the cause-and-effect relationships that explain business performance. When using the framework within Excel-based software accessible at www.wiley.com, the resulting value map lights the way for valuation professionals and consultants to help client companies increase business value.
Value Maps provides thorough coverage of:
- Why traditional approaches to valuing a privately owned business are incomplete
- The one level of the SPARC framework that matters far more than the others
- Why benchmarking a company against a public-company composite is the first step in value enhancement
Using the framework and tools offered by Value Maps, analysts, business appraisers, and consultants have a nuts-and-bolts guide to help clients enhance the value of their businesses. Advisors can replicate the process across their existing client bases. With 22 vignettes illustrating real-world applications of the SPARC Framework, Value Maps walks you step by step through a rigorous process to help clients unlock wealth.
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A copy of the book is included in the tuition for the Value Maps seminar and will be distributed onsite.
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