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
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