The Mañana Man Gets Serious--DeWese
This concept is important to the owners of privately held companies especially, but not limited to the printing industry. This is because many owners do not see themselves as investors, but rather as "business operators" who merely earn a living from the business.
This attitudinal difference between investor and operator can impair the process of building value. Instead, the ideal circumstance is one where the individual seeks both value appreciation and operational success.
3--How do you build value? What are the secrets/characteristics of the most valuable companies?
A. The most valuable companies are led and managed by individuals who are behaviorally sound—that is to say, they are absent of officiousness, pretentiousness and selfishness, and are selfless human beings. Additionally, they are balanced managers who are accomplished in the entire range of management functions, including finance, accounting, operations, marketing, sales, planning, controlling and, most importantly, motivating people.
They are single-minded people whose principal life focus is the growth and success of their enterprise. This is not to say that they have no other interests. It does mean their business life is not subject to distractions that can range from drinking, gambling and philandering to gardening. The company is their primary life activity. Finally, these managers possess the highest integrity.
B. The most valuable companies have identified niches within specific market segments that they have learned to serve. Serving a niche creates competitive barriers to entry and insulates the company from excessive competition. A general commercial printing company that has learned to serve the promotional needs of the pharmaceutical industry can accomplish this, for example, or has learned to serve the miniature folded insert/outsert needs of the same pharmaceutical companies.
The niches may not require specialized equipment, but they do require specialized knowledge. Niche-focused companies, when well managed, almost always enjoy superior income statement margins when compared to their unfocused brothers and sisters. As an example, niche-oriented companies frequently enjoy gross margins in excess of 30 percent where a generalist company down the street may do well to earn gross margins of 25 percent.