I came across an excellent book last week in a seminar I was in.  The book is by Robert Slee and it’s called Midas Managers.  It’s a great book about how business owners in the small and mid-cap markets can transform their businesses and create higher value.

It’s a lot about working on the business, rather than being caught up in the business day to day.  These people take a look at their business and see what is the best use of their company resources.  Rather than continuing to do things the same way they’ve always been done in the past, he shows examples of where heads of companies have made some major shifts in direction.

One thing that he advocates is where it is that companies can increase their value:

1.  One dimension is financial by understanding the capital structure and how companies operate.  He points out that the larger companies can achieve premiums in valuation over smaller companies.  So, it makes sense to try to find ways to grow the company and move yourself up the value chain.

2.  Another way to create value is by making your revenue base more predictable and more recurring.  It could be moving from a service base to more of a product base.

3.  It can also be developing your uniqueness as a company.  Determine what really makes you special and put your arms around it and, perhaps, creating a brand.  Rather than just selling a product, it might be a particular service wrapped around that product.

4.  Another part of value is determining what others could do just as well as you can and stop spending money in those areas internally.  Redeploy to outside resources and put your efforts inside more in areas where you add the most particular value.

Check out this book.  It’s a quick read, lots of wonderful real examples not just theory on how companies have transformed themselves by doing things differently than what they’ve done in the past in order to maximize the valuation of your company.  Two companies of the same size and the same industry and, perhaps, somewhat similar results could have very different valuation because of the differences in how they operate.

Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
Bringing new insights on results and maximizing company value