A professional advisory board process can double the value of a privately-owned business, say authors William Hawfield and John Zaepfel in their new book, “Game-Changing Advisory Boards: Leveraging Outside Wisdom to Deliver Sustainable Value”, where they provide a roadmap to amplify business value.
Hawfield is a professional business manager and owner who has served on 35 boards as a member or chairman. Zaepfel has a varied and successful business career as a CEO, board chairman, and CEO coach. He has served on 52 public and private company boards.
The authors have used professional advisory boards to build businesses with sustainable value in nearly 90 companies with combined revenues of more than $5 billion. Collectively, the owners received almost $1.1 billion when they sold.
“Effective corporate leaders know how to work with their boards to build long-term value,” says Lee Iacocca, former chairman of Chrysler Corporation, commenting on the professional advisory board process. “This book shows owners of privately-held companies how to create, manage and motivate a board that can help them become highly successful. It is easy to read and ready to use.”
After observing and guiding numerous transactions in which companies were sold, the authors have identified numerous “value factors” that investors and buyers use to determine the value of a business. Here are their top seven:
1. “Must have” company positioning
2. CEO leadership and capacity
3. EBITDA dollars and percentage of sales
4. Sustainable gross margins
5. Management team depth and capabilities
6. Viable growth model and structure
7. Diverse products and customers
The authors contend these factors and others will have a significant impact on the value of a business when it is evaluated by an owner or anyone who is considering investing in it. Some are non-financial factors, but they all speak to the quality and sustainability of earnings. Professional advisory boards help owners execute all of these factors as they support building long-term value.
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