What makes a business successful? Providing value, cost effectively! “Value drivers” leverage business profitability and reduce risk. Value drivers distinguish successful companies from their competitors.

For many business owners, their business represents their life’s work and most of their net worth. Sadly, only about 1 out of 4 privately held businesses actually sell, according to statistics collected by the International Business Brokers Association. So, unless you want to just close the doors and retire, it’s smart to take steps to maximize the value of the business.

Value drivers vary by type of business. While reputation and cost control are always important, other factors vary. For example:

Restaurants – are known by reputation for good food and a positive dining experience. Value (profit) drivers for a successful restaurant include: location, concept, menu, quality of cooking and wait staff, and cost control.

Technology companies – must have a core product/technology or “know how” that solves a customer problem. Key value (profitability) drivers include: highly skilled workers, quality and cost control, and R&D (research and development).

Professional Services Firms – are known by reputation. Key value (profitability) drivers include personal relationships, highly skilled staff and cost effective service delivery.

Retail – brand/merchandise mix and location are critical. Key value (profitability) drivers include inventory management and cost control.

Frequently, value drivers are “intangibles” and employees.

Intangibles (intellectual property) and human resources (who go home at night) can be protected and leveraged through a combination of business strategies and legal protections. Business strategies include incentive compensation plans to recognize, reward and retain high performing employees. Legal protections include requiring key employees to sign non-compete agreements, registering Trademarks and Copyrights, and taking steps to protect proprietary information/trade secrets such as recipes and formulas. Contracts with key players, including partners, customers and suppliers, are also important.

What are the value drivers for your business?

Start by using the SWOT Analysis – Strengths, Weaknesses, opportunities and Threats – this will help you identify the “value drivers” for your business. With this approach, you can focus on key value drivers.

In conclusion, it’s easy to be distracted by all the demands competing for the business owner’s time and attention. To maximize the value and profitability of your company, you need to focus on the key value drivers – which may be intangibles and employees – in addition to having up-to-date equipment and systems.

An independent perspective can be invaluable in identifying value drivers and putting together a plan to increase the profitability of your business.

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A few Hollywood movies aside, the field of mathematics doesn’t have much glamour or star quality associated with it. And for most people, it doesn’t carry the ring of fun, either. “Math Club” sounds more like a refuge for smart misfits than like a gathering that either kids or adults would be clamoring to join.

Karen Treber of Frostburg, Maryland had these sorts of images in mind when she wanted to help boost math scores at her sons’ school. “Coming up with a cute name was half of the battle,” says Treber. Since most kids love sports and look up to accomplished athletes, she promoted the math events as “Mathletics.”

In keeping with the appealing name, learning activities involved doing things like slicing pizza to understand fractions and measuring the perimeter of the gym with a ruler. Nearly half the student body turned out for the school’s first after-hours installment of “Mathletics.” Even better, a year later, for the first time, 100% of the school’s fourth graders passed the state assessment test in math. The new name had paved the way for a change in image and performance.

If you’d like to transform perceptions of an activity, service or product, first brainstorm the negatives ascribed to it by your target market. Next, brainstorm things that have qualities that would be embraced by your audience. Then look for ways to combine items from the two lists to create a surprising twist or paradox – or a way to bypass the negatives altogether.

For example, tapioca pudding consistently finds its way onto “10 most hated foods” in both the U.K. and the U.S. Probably many people who know only its negative reputation and not its taste could be persuaded to give it a try by renaming it in comparison with something more beloved or more glamorous, such as “vanilla mousse,” a “white sundae” or “Thai pudding.”

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