Business Reality Check

As you know by now, I am a family business advisor. Dealing with Family businesses and SMEs has led me to understand both the strengths and weaknesses of such businesses. With all this experience in mind and with a deep understanding of the challenges and opportunities ahead, our team at EMCS together with AIS Environment have been working to come up with a holistic service for Family Businesses and SMEs – The Business Reality Check. This is a product that we have developed which will allow business owners and business leaders to get a 360-degree overview of their business and moreover, be able to see the linkages between the various elements in their business, to understand what needs to improve to perform better. We see many business owners at a loss of what is not functioning well in their business. Hence, this Business Reality Check service will provide business owners with all the tools to identify the issues that are keeping the business back and what needs to be done to enable the business to achieve its full potential.

The Business Reality Check Service is based on these elements:

1. A General Economic and Industry Analysis

This analysis will provide business owners and leaders, with an overview of the general economic performance and economic forecasts, to enable their business base their decisions on the likely macroeconomic situation they would be facing. This analysis will also provide an industry analysis, of the particular industry your business is operating in. This to enable you to understand, if your business’s performance is above, within or below the industry performance.

Benefits to be obtained from this section

  • Empower businesses to base their decisions on the macroeconomic situation
  • Facilitate comparability between companies within that industry
  • Identify whether your company is thriving or lacking behind competitors.

2. Overview of Strategic Direction

We understand that many times, businesses are completely taken up in the daily operational issues and have little or no time to have a look around them to understand the strategic direction of their business. They have little or no time to understand what their real strength and weaknesses are and also understand the opportunities and threats that are coming from the external environment, the competition and business risks they are facing and what is creating and destroying value in their internal operations. Understanding all this would help your business identify your strategic objectives and priorities and hence what needs to be done to achieve such objectives. In the case of family business, as part of the whole strategic plan we would also assist in succession planning, whereby we can draw up any family constitution and succession plan needed.

Benefits to be obtained from this section

  • We will help business gather a strategic mindset, to stop just having an operational mindset, and give planning the priority it serves.
  • We will help businesses understand what their real strength and weaknesses are and also link the opportunities and threats from the external environment.
  • We will help businesses to determine the company’s objectives and priorities and how it should plan to accomplish them.
  • We will help you to:
    • Understand your business better
    • Address weaknesses
    • Deter treats
    • Capitalise on opportunities
    • Take advantage of your strengths
    • And develop business goals and strategies toward success.

3. Assessing Governance

Business needs to be able to rest on good corporate governance as the cornerstone of the direction a business should be heading too. However, the reality on the ground, is that many SMEs and Family businesses, fail to have an adequate corporate governance structure to make sure that the business is managed and directed according to the highest commercial principles. We would therefore assess the overall organisational structure of the business together with the effectiveness and strategic direction the Board of Directors is providing. We would then delve deeper to analyse the effect the overall governance is having on important areas like work conditions and career development & training

Benefits to be obtained from this section

  • We will assess the business governance and help in guiding the business toward good governance, which will yield the following benefits:
    • Efficient processesSmooth running operationsGood reputationClarityFinancial sustainabilityClear strategic direction and objectives
    • Effective response to changes in the external environment

4. Assessing Management

The best strategic plan will need experienced and skilled management with the right attitudes to execute successfully any strategic plan to achieve the outlined objectives. Therefore, we would assess management across various attitudes, including their attitudes towards strategic objectives, planning, risk, growth and training needs.

Benefits to be obtained from this section

  • Ensure that the management hold the right attitudes and qualities to successfully execute any strategic plans.
  • Effective employee management strategies will benefit the company as it will:
  • Strengthen employee retention, thus lower the cost in relation to employee turnover.
  • Keep employees productive and successful, thus increasing the company’s profitability.
  • Foster a positive work environment
  • Ensure an exceptional working experience
  • Deliver a Training Needs Analysis to provide what skills gaps are needed for management to perform well

5. Business Track Record & Financial Analysis

Many SMEs & Family Businesses fail to have a wide-ranging financial analysis that links strengths and weaknesses in the business. We would bring our insights in analysing the financial situation of the business and how certain weak financial performance is linked to weaknesses in the business. We will also assess if the business has the necessary discipline to have constant and timely financial and KPI reporting and budgeting.

Benefits to be obtained from this section

  • The service of financial analysis will benefit business as it will help them make informed decisions, with an unbiased view of their business’s financial health.
  • Business Track record & Financial Analysis will provide the business with the following benefits:
  • Better debt management
  • Better cash flow management
  • Reduce risk exposure
  • Improve supplier relationship management (if any)
  • Help owners to identify the best possible investment opportunities

6. A win-win for your business – financial & environmental sustainability

Over the past decade or so, there has been a major shift in mentality and demand from unsustainable products to eco-friendly ones. Not only is greening your business good for the environment, it leads to major financial benefits. You can slash operational costs by reducing utility use such as energy and water, as well as turning waste into materials which can be reused over and over again. By investing in new and clean tech which simplifies and automates existing systems, you could further increase your profit margins, and keep you one step ahead of your competitors. Moreover, greening your business will boost your reputation by enhancing your brand, appealing to a younger audience, raising customer loyalty, and creating healthier workspaces.

Benefits to be obtained from this section

  • we will help you identify the best upgrades for your company. Our experts would guide you on the how to take action, priority areas, timeframes & cost indications. Benefits include:
    • You could get up to €15 million in government grants during your green business transition.
    • Transitioning to energy-efficient solutions will also keep you one step ahead of competitors
    • Shifting to a green business will make your business more attractive to investors.

7. Company Valuation

Many business owners or leaders do not have a firm understanding of their business’s value. They also fail to where in your business is value being created and where it’s declining. It is a common occurrence that various businesses have certain areas doing well and others less so. Many business leaders who do not have a value mindset and hence instead of devoting the bulk of their time and energy to making the well-performing businesses better, they use the bulk of their time trying to fix a struggling business area. After having analysed all the other aspects of your business, we would then be able to do a company valuation and link it to all the aspects of your business.We would base our valuation on a rigorous free cash flow approach, using DCF techniques and also providing a peer comparison.

We will conduct a company valuation which will yield the following benefit:

  • Measuring year-on-year company growth and building comparative data
  • Compare the business against the industry benchmarks
  • Can prepare the business for sale and establishing a sale price
  • Help the company secure investment and funding

This Business Reality Check Service will be officially launched during the upcoming event organised by the Family Business Committee of the Malta Chamber on the 1st February 2023 at 9am at the Malta Chamber.

Click HERE to register.

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