Canada

Identifying key value drivers in your business will help you allocate time, resources and capital to the areas of your business that will contribute the most to delivering long-term shareholder value.

1. Market

Key Questions

  • What is the market for your business, what is your share of that market, and what are the barriers to entry?
  • Who is your ideal customer, how loyal is your customer base, and why should they buy your product versus those of your competitors?

Best Practices

  • Conduct an in-depth market analysis to understand competitive dynamics, supply and demand drivers, and long-term growth trends
  • Evaluate and address potential concentration risk in your business (i.e., concentrated customers, suppliers, products, geography)
  • Use a customer relationship management system (CRM) to track customer interactions and chart customer behavior

2. Investment

Key Questions

  • Do you have access to capital (debt, equity), and what is the cost of this capital?
  • What capital expenditures are required in order to drive growth?

Best Practices

  • Explore various alternatives for raising capital based on current market conditions
  • Benchmark your capital expenditure and minimum working capital requirements against industry peers

3. Profitability

Key Questions

  • How will you manage expenses to ensure that costs are not growing faster than revenue?
  • What is the optimal tax structure for your business?

Best Practices

  • Work with your CPA to conduct a detailed "quality of earnings" analysis of your business
  • Confirm you are utilizing the most up-to-date technology to optimize reporting and productivity
  • Look for opportunities to renegotiate customer and supplier contracts on more attractive terms

4. Employees

Key Questions

  • Do you have the right people in the right roles and are they motivated to stay and grow with the company?
  • Are you measuring productivity and employee performance in a way that is useful, fair and transparent?

Best Practices

  • Conduct periodic talent reviews and capacity analyses with your senior management team to ensure that employees are positioned, trained and motivated appropriately
  • Set clear, measurable goals, provide actionable feedback and conduct regular one-on-one reviews
  • Develop a succession plan for key employees in the event of departures

5. Strategy

Key Questions

  • What is your long-term strategic plan for the business? Have you discussed this plan with your board, shareholders and management team?
  • How is your long-term strategic plan reflected in the business practices, incentive structure, operational procedures and financial projections of your business?

Best Practices

  • Work with your board of directors and senior executives to develop a formal five-year strategic business plan that incorporates each key business function (finance, operations, employees, etc.)
  • Consider reviewing the plan and key milestones every year or two in an all-day strategy session with your board and key management

6. Brand

Key Questions

  • How is your business perceived by the public? Does your target audience understand your product?
  • What is the best way to deliver your brand message to your target audience?

Best Practices

  • Identify the channels (e.g., print, web, social media) that provide the best access to your target audience
  • Use analytics to gauge which channels are most effective and allocate resources appropriately
  • Disclosure

    This material is the property of The Bank of New York Mellon Corporation, its subsidiaries and affiliates (collectively, “BNY Mellon"). This material, either in whole or in part, must not be reproduced or disclosed to others or used for purposes other than that for which it has been supplied without the prior written permission of BNY Mellon. This material is provided for illustrative/educational purposes only. This material is not intended to constitute legal, tax, investment or financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. BNY Mellon Wealth Management, Advisory Services, Inc. is registered as a portfolio manager and exempt market dealer in each province of Canada, and is registered as an investment fund manager in Ontario, Quebec, and Newfoundland & Labrador. Its principal regulator is the Ontario Securities Commission and is subject to Canadian and provincial laws. Trademarks and logos belong to their respective owners. ©2018 The Bank of New York Mellon Corporation. All rights reserved.