Value Diagnostic

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Questions help surface issues that need your attention, challenge outdated assumptions and uncover new and interesting paths forward.

The Shaw & Co value diagnostic asks 15 challenging questions, focusing on the five key areas of your business where you can achieve tangible results. The five key areas are:

Shareholder ambitions
Financial performance
Innovation and Future vision
Team
Market Dynamics

This quick diagnostic seeks to initiate important conversations that will help you consider, prioritise and map out your next steps.

Start Diagnostic

1. How well defined are your medium term strategic goals?

Crystal clear Great stuff! They may need refreshing Yes - regularly reviewing longer term goals is good practice. My medium term goals are not defined A more structured approach to driving your business forward can help you achieve more.

Developing and communicating clear goals helps your team to focus on the right things. Make them ambitious enough that they inspire you and credible enough for the team to believe that they are achievable.

2. Where is your business in its natural lifecycle?

Growth During the growth phase you’re out of the woods and on the upward curve of the hockey stick. All the hard work you’ve put into your business is paying off, and it feels great. However, it’s not time to drop the ball. What worked for you whilst scaling up, won’t work for you as you strive for the next level. Scaleup The scaleup phase is fast, furious and exciting. You get to try a lot of stuff out, see what works, cut what doesn’t, refine what does and keep running forward. At this stage it’s important to build a solid foundation to support the stability of your business in the long term, and to carefully manage cashflows to prevent running out of resources. There’s just so much you could be focusing on at this stage that you need to be disciplined in ensuring that those the key things that keep the lights on are especially well managed. Plateau If the growth trajectory of your business has slowed you may be feeling frustrated. Is it time to reinvigorate efforts to ignite a new growth phase?

You've brought your business this far. Are you clear about what point it is in the typical business lifespan? Are you clear about what to focus on to move it in the right direction?

3. Do you have a plan to sell/exit your business?

Yes Well done, having implemented your exit strategy before you go to market improves your chances and choices. Vaguely Most advisors would recommend that a business develops and implements an exit plan 18-36 months ahead of a sale to maximise value. No Developing your succession plan so that your business can carry on without you when you reach retirement, or when you decide to move into a less involved role would be wise.

It is a mistake to believe that an exit will take care of itself. It's unlikely that there will be a queue of buyers waiting to make an offer. There is a surplus of privately owned businesses looking for a new home. Proper exit planning can dramatically increase your chances of success.

4. Are your profits growing consistently year on year?

Yes, and the outlook is good. Amazing! Keep it up. Now might be a good time to consider an exit but only if that fits in with your own personal goals. Pretty much. We'd like the profit trend to be more robust though. Sounds encouraging, it could be worth having a chat with us to see if we can help firm up the profit trend. No. It's volatile. Every business goes through peaks and troughs, All the same, it can be tough for those in charge. An additional set of experienced eyes might be able to support the move towards a more consistent profit curve.

The majority of business owners will only experience one or two windows to exit in the course of building their company. In addition to favourable macro-economic conditions, the best time to exit your business is when you can demonstrate consistent growth, with more to come. Believable future profit streams are what buyers and investors are looking for.

5. Which answer most accurately describes the quality of your revenue?

It’s predictable, profitable and diverse. Great, everyone would like that sort of revenue stream. It's profitable and diverse but difficult to predict. Giving some consideration to the characteristics and sources of your revenue to improve the predictability could be a useful exercise. It’s volatile. It's definitely worth investing some time and expertise on improving this situation.

We hear all the time that growth drives value. But focusing on growth alone is missing a trick. The quality of revenues are also important. High quality revenue has three key characteristics: predictability, profitability and diversity.

6. Are you right on top of your cashflow?

We manage our cash flow very efficiently. Sounds positive. Be sure to review your position regularly to be aware of having too much cash sitting around on your balance sheet. This is an inefficient use of your capital when you could be making it work for you instead. It's OK but we have missed opportunities as through not managing it as well as we could. Better control of your cash will help your business to grow. We’d be happy to help you tidy things up in this regard. It's a constant struggle Time to take a really good look at your business model.

Cash flow is the single most important financial aspect for any company to survive in tough times and to grow and prosper in the good times.

7. What impact will macro trends have on your business?

I am very aware and have undertaken rigorous scenario planning to mitigate risk by being prepared for many eventualities Textbook! I keep up to date with industry trends, but in practice take a more reactive approach. Regular (at sensible interval) scenario planning will help you to minimise risk in your business and potentially ensure you position your business better than the competition. What will be will be True. But it would be wise to defend your business against clear future risks.

We're surrounded by big political, economic, social, demographic, technological and legal forces that will inevitably affect most of our businesses. How diligently do you regularly review relevant developments in these areas and their likely impact on your company's future?

8. Which statement best describes your marketplace?

I barely recognise it today from how it was when I set up my business Things are changing fast for sure, and if you’re still here, you must be handling it pretty well! Keep looking out for new trends and opportunities in your market. My industry is quite slow to evolve and change Try not to let the lack of pace limit innovation in your business. Slow, traditional industries are ripe for new entrants to disrupt. And if you have the appetite to lead innovation in your market, go for it! I need to do some more research before I can answer that question We can help with your analysis if you like.

Continual monitoring of market information and industry research will potentially give you an advantage over the competition and give you the best chance of moving early into new opportunities.

9. Are you relevant? Will you be relevant five years from now?

Yes. We place great emphasis on improving our offering to ensure we stay with/ahead of the times. Brilliant. We’d love to hear more about your exciting future plans. We’re working on it. Constantly evolving is a good approach to business. If we can help you to clarify your thinking, get in touch. It's difficult to run today's business as well as think about how our goods and services might need to change for the future. Yes it is. Maybe someone sitting outside the business could help with that.

What works today won’t necessarily work as well tomorrow. You need to be constantly evolving alongside your customer’s needs. Clearly then the best way to go about achieving and maintaining relevancy is to know your customer inside out.

10. Are you crystal clear about the best way to grow your business?

Yes I have a clear idea as to how I will develop my business Brilliant. I’m thinking about it, and considering multiple options We’d love to bounce some ideas around and act as a sounding board if that would help. No. I've put a sound foundation/infrastructure in and am reluctant to make major changes unless I have to. Understandable. Things are changing so fast though these days that a sound central foundation coupled with an agile set of peripheral capabilities is likely to me more competitive.

Maintaining a level of entrepreneurialism in your business as it grows is important. Once a company becomes too rigid, creativity and innovation are stifled and it becomes hard to change to keep up/ahead.

11. Are you making decisions today that will help people and the planet tomorrow?

Yes and this is really important to us. You’re set for today and tomorrow. Not really. Is there an opportunity here? No, my business can't contribute much in that area. Possibly not. There might be benefits in doing what little you can.

Amongst many of the advantages of building a sustainable business is that today's and tomorrow's employees, consumers and legislators will favour it and enable it to become more profitable than less sustainably run competitors.

12. Are you making as much use of digital tools as you reasonably could be?

Yes, we are very digitally savvy and stay on top of emerging tech Awesome. We’re implementing a few projects to optimise business processes through better use of digital Exciting times. We don't really know where to start and have processes in place that have worked well for years. You and most other SME's. There's an opportunity to steal a march on your competition.

Don’t just have a digital strategy, digitise your strategy!

13. Do you have the right people on board?

Yes. Decisions have been progressively devolved to them Great work. It sounds like you have a pretty resilient business. Developing the team is high on our agenda Good initiative. It takes a while to create a high performing team that works well together. No. The business is pretty dependent on me and I'm not sure where to start to change that. True. But there will be a way and once you take the first step you will be moving in the right direction.

Could your business survive without you? If you had to take an unavoidable 6 month leave of absence starting tomorrow? A strong team will be needed to run the business without you when the time comes for you to exit.

14. Why would someone work for your business rather than your competitor?

We place lots of emphasis on being a great place to work. Excellent. Our perks are reasonable enough, and we treat people well What more could more be done to improve staff attraction, productivity and retention? I don't know. Do you think this is holding you back or is it not relevant to your business?

If you can convince the best people to work for you, you have already gained a major competitive advantage.

15. How likely is it that a key colleague will leave in the next 12-18 months?

Very unlikely We hope you're right. 50-50 Do you have a contingency plan to deal with the departure of your key people? Our staff turnover is high so it’s pretty much a guarantee What are you doing currently to improve staff turnover?

Staff turnover, particularly relating to key staff, is expensive and leads to inefficiencies.

Your score: 0/45

Ok, so the good news is that there’s a lot to work with here. We’d recommend doing a full review to assess those areas of your business that you’re not so sure about right now in order to get a good understanding for where you are. We can then use this data to plot, plan and otherwise work towards your future goals.

Hey, not bad! But you likely know there’s so much more you could be doing to build value in your business by focusing on the most impactful areas. And we can help you to do this in an extremely time-efficient manner so that you see results quickly.

Amazing result. You’re doing a great job of focusing on the key areas in your business that build value. Though your formula might work for right now, it’s important to be continually evolving to stay relevant tomorrow and beyond. If you want help plotting what next and how, get in touch.

Let us know if we can help

Next step: Get in touch with Jim Shaw to see how we can help.

Are you interested in developing your business to effectively and efficiently build value? Shaw & Co’s Value LAB could be the next step for you. For business owners serious about growth, this exclusive interactive workshop deep dives into the five key areas that build or destroy value in your business, helping you to get a clear idea for how you can move forward, and triggering exciting new ideas to get ahead of the competition.