In “Equity Value Enhancement,” Dr. Carl Sheeler outlines the fundamental principles that many of the world’s premier business leaders have applied in rapidly growing their own commercial empires. Moguls like Sir Richard Branson, Mark Cuban, Charles Schwab and Oprah Winfrey have all demonstrated the capacity to look beyond raw financial metrics to apply intangible qualities like relationships and culture. “Equity Value Enhancement” is a publication of John Wiley & Sons, and is available today on Amazon. Dr. Sheeler offers complimentary preview chapters on his website at www.carlsheeler.com.
“New wealth can abound, even in uncertain markets, by scaling a company’s value in as little as 6 to 24 months,” explains Dr. Sheeler. “Today’s business leaders have repeatedly shown a willingness to see opportunities where others see only risk and numbers. Data may be king, but it’s meaningless without analytics, understanding and execution. ‘Equity Value Enhancement’ is essentially a toolkit for developing a holistic strategy to find and act on uncommon knowledge.”
According to Dr. Sheeler, three components underpin the concept of equity value enhancement: maximizing human capital; mastering risk; and ensuring every dollar spent is optimally leveraged. Ultimately, freeing up time and resources in the pursuit of new opportunities, while keeping a watchful eye on risk, is paramount in being an industry brand.
“To my mind,” adds Dr. Sheeler, “one of the most important and impactful ways to realize value in any business is to find ways to work ‘on’ the business rather than ‘in’ it. Moreover, making the most of relationships from staff, vendors, advisors and clients is what truly separates high-net worth, entrepreneurs taking their own paths than herds of peers migrating familiar trails.”
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To illustrate the power of Equity Value Enhancement, Dr. Sheeler proposes the example of a CPA tasked with managing the accounts of a large, successful firm. Assuming $5 million in profits, zero debt and a 5x price multiple based on overall risk and performance, such a firm would have an equity value of $25 million. In this scenario, the CPA has two options – conduct business as usual and keep value stable, or propose creative avenues for enhancing value while not taking undue risks. Even bolstering profits by another million dollars and increasing the price multiple to 8.5 would result in a new business valuation of $51 million, a tremendous $26 million return on investment for the CPA’s time and expertise.
A savvy CPA – one with a value-driven perspective – has several methods available by which to help a client elevate their valuation – many often overlooked. A well-considered key person life insurance policy; better owner time and resource management strategies; updated agreements; and the careful application of corporate tax savings could collectively enhance value. Seeing these possibilities therefore separates a good CPA from a great one.
Upper-echelon executives and company founders certainly didn’t achieve their status by accident – instead, they applied the tenets of Equity Value Enhancement to their vocations; and many – Branson, Cuban, Schwab and Winfrey included – actually own Dr. Sheeler’s recently published text on the subject.
Dr. Sheeler is the managing director at Berkeley Research Group. “EVE” is the culmination of a quarter century of experience measuring and maximizing the value of intangible assets.