BREAKOUT VALUATION

Debut author, entrepreneur, and investment fund founder Donohue offers a book of strategic financial advice for small-business owners.

For most entrepreneurs, valuing a business is a somewhat murky process that typically occurs only when one wants to sell that business. This book broadens the concept of business valuation, suggesting that entrepreneurs should do it themselves and view it as an integral part of building an “Entrepreneurial Legacy.” Donohue, who oversees Hill Capital Corporation, demystifies the valuation process, walking readers through fundamental financial steps in a nonthreatening, reassuring manner. After labeling the final product a “Breakout Valuation,” Donohue details its nine specific components, each of which is discussed in detail, including: “confidence, vision, curiosity, people, communications, cash management, financial forecast, capital strategy, and business design.” Although the book is divided into traditional chapters that clearly address these components, additional elements notably enhance readability and relatability, including a fictional female entrepreneur named Chris who faces challenges that many small-business owners will surely recognize. Another is the inclusion of “value drivers” relevant to the nine components; for example, “Clearly Differentiated Offerings,” he says, is a communications value driver that offers a competitive edge: “When a company operates in a crowded market with clear points of differentiation, it can motivate investors and buyers substantially.” Each driver includes a definition, an example, and an explanation of how to implement it. Occasional “Questions of Essence” will help readers dig deeper into particular concepts, and an entire chapter is devoted to asking the right questions to uncover “blind spots.” Overall, Donohue does a fine job of explaining cash management and basic financial statements, reducing the likelihood a business owner will be intimidated by accounting; for example, the author doesn’t merely show an example of a profit and loss statement, but also shares lucid, experience-based insights about its various elements.

Down-to-earth, informal, and beneficial financial counsel.