Value Maps

WARREN D. MILLER, CFA, ASA, CPA, is a cofounder of Beckmill Research LLC, a firm that specializes in valuations, mergers and acquisitions, strategy, litigation support, exit planning, and statistics-driven research. He has taught CPAs and other professionals in thirty states, Puerto Rico, and Canada. His work has been published in Harvard Business Review, Business Valuation Review, CFA Magazine, Strategic Finance, CPA Expert, Value Examiner, and American Fly Fisher. He and his wife, Beckmill cofounder Dorothy Beckert, live in Virginia's breathtaking Shenandoah Valley.

• Preface xiiiAcknowledgements xixAbout the Web Site xxiiiList of Acronyms xxvPart I Cornerstones 1Chapter I Why a New Approach Is Needed 3Valuation as Craft 5The State of Our Craft 6Cause and Effect: What and Why 7Multidisciplinary Tools for Analyzing Value Creation 8Parameters of Valuation 10What We Know about Risk 11Components of Risk 12A Framework for Unsystematic Risk 13Unlocking Business Wealth 16Summary 17Additional Reading 17Chapter 2 Tools from Strategic Management 19History 19Perspective 22Valuation Tools 22Strategic Intent 23Generic Competitive Strategies 26Resources 29Competitive Analysis 32Distinctive versus Sustained Competitive Advantage 34VRIO 37Customer Satisfaction Surveys 38Diversification 39Unlocking Business Wealth 42Summary 43Additional Reading 43Chapter 3 Tools from Industrial Organization 45Perspective 46Tenets 47Tools 49Unlocking Business Wealth 62Summary 62Additional Reading 63Chapter 4 Tools from Organization Theory 65Perspective 68Tenets 70Tools 70Unlocking Business Wealth 82Summary 82Additional Reading 83Chapter 5 Tools from Evolutionary Economics 85Perspective 88Tenets 89Tools 89Unlocking Business Wealth 103Summary 103Additional Reading 104Chapter 6 Tools from Austrian Economics 105Perspective 110Tenets 112Tools 113Unlocking Business Wealth 123Summary 123Recommended Reading 124Part II Pouring the Foundation 127Chapter 7 The Straight Scoop on Value Drivers 129Definition 129Value Drivers versus Balanced Scorecards 131Why Value Drivers Matter 132The Regenerative Power of Capitalism 134Assessing Durability 138Summary 139Additional Reading 140Chapter 8 The “OT” in SWOT Analysis: The Macroenvironment 141Defining the Domain 141Unit of Analysis 144Trilevel Unsystematic Risk Framework 145History and Background 146Why Does the Macroenvironment Matter? 147The Forces 148Summary 153Additional Reading 154Chapter 9 The “OT” in SWOT Analysis: The Domain 155The Roots of Domain Analysis 155Oligopolies Large and Small 155Price Competition in an Oligopoly 158Published Industry Risk Premiums 158The Domain 161Summary 165Additional Reading 166Appendix 9A: Competitive Analysis and Estimating Market Share 167Chapter 10 Getting to “Why”: Analyses, Composites, and On-Site Interviews 171Financial Ratios 171A Key Metric 172Finding Sector-Specific Metrics 173The Analysis 173How to Construct a Composite 175Prepping for the On-Site Interviews 175Conducting the On-Site Interviews 177Summary 180Chapter 11 The “SW” in SWOT Analysis: The Company and SPARC 183Cause-and-Effect Relationships 186Value Drivers and Value Destroyers 190Assessing Durability of Advantage 202Back to VRIO 202Summary 204Appendix 11A: Bringing It All Together: Quantifying Unsystematic Risk 205Chapter 12 SPARC Archetypes among Small and Medium-Sized Enterprises 207Exploiter and Extender 208Explorer and Experimenter 210Equivocator 213Summary 214Part III Tales from the Firing Line 217Chapter 13 Construction and Manufacturing 219Construction 220Specialty Publishing I 223Specialty Publishing II 226Specialty Manufacturing 228Packaging 232Chapter 14 Business to Business 237Safety Equipment/Supplies 237Industrial Supply 240Construction Materials 244Antique Building Materials Reclamation 249Chapter 15 Transportation 255Transportation Collection Services 255LTL Trucking 258Freight Forwarding 264Chapter 16 Specialty Retailing 269Jewelry I 269Jewelry II 273Building Materials 276Pharmacy 277Chapter 17 Services 281Outplacement Services 281Executive Search 283Private Equity 285Investment Banking 287Dental Lab 289Quick-Lube Services 291Part IV Practice Management 297Chapter 18 The Engagement Process 299When Can an Engagement Include a Value Map? 299Finding Good Clients 300Avoiding Problem Clients 301Marketing and Selling the Work 302The “Shake-’n’-Howdy” Visit 303Pricing the Engagement 304Engagement Letter 1 305Highlights of Engagement Letter 1 306Managing Expectations 307Engagement Letter 2 309Summary 311Chapter 19 Working with Clients 313A Few Words about Family Systems 313Processes 315How Not to Do It 315How (Else) Not to Do It 317Start at the Beginning 317Think like a Buyer 318Planning the Engagement 319As the Process Unfolds 321Winding Up the Value-Mapping Process 322Summary 323Additional Reading 323Chapter 20 IFRS, IVSC, and Value Maps 325The Valuation Process Outside the United States 326The Cost of Capital Outside the United States 326Gathering Data Outside the United States 327Summary 332Chapter 21 Epilogue: The Future for Value-Mapping Services 333The Future for Valuation Services 333Marketing Matters 335That Special Cadre Dedicated to Delivering Value to Clients 340Closing Words 342Bibliography 345Index 351