This document outlines the sections of a business reality check report: economic and industry analysis, strategic direction, governance, management, track record and financial analysis, company valuation, and environment and sustainability. Each section is described in terms of the analysis it includes and the benefits the business can obtain from understanding that section, such as identifying opportunities and threats, assessing strengths and weaknesses, ensuring effective management, and improving financial oversight, valuation, and sustainability practices. The overall goal is for businesses to use this report to better understand their position and make informed decisions to improve performance and long-term success.

1. February 2023
BUSINESS REALITY CHECK
Charting the Course for your Business

2. Business Reality Check
• Economic and Industry Analysis
• Strategic Direction
• Governance
• Management
• Track Record & Financial Analysis
• Company Valuation
• Environment & Sustainability

3. Economic and Industry Analysis
Benefits to be obtained from this section
• Empower businesses to base their decisions on the
macroeconomic situation
• Identify the direction your industry is heading
• Facilitate comparability between companies within that
industry
• Identify whether your company is thriving or lacking behind
competitors.
Analysis in this section
• Macroeconomic analysis
• Economic forecasts
• Detail industry analysis
• Industry benchmarking
• Linking the economic context to business performance

4. Strategic direction
Benefits to be obtained from this section
• Understand your business better
• Address weaknesses
• Deter threats.
• Capitalise on opportunities
• Take advantage of your strengths
• And develop business goals and strategies toward success.
Analysis in this section
• Help businesses gather a strategic mindset, to stop just having an operational mindset,
and give planning the priority it serves.
• Help businesses understand what their real strength and weaknesses are and also link the
opportunities and threats from the external environment.
• Help businesses to determine the company’s objectives and priorities and how it should
plan to accomplish them.

5. Assessing Governance
Benefits to be obtained from this section
• Efficient processes
• Smooth running operations
• Good reputation
• Clarity
• Financial sustainability
• Clear strategic direction and objectives
• Effective response to changes in the external environment
Analysis in this section
• Corporate Structure
• Relationship between Board of Directors (BOD) and
Ownership
• Assessing Company’s Strategy
• Attitudes towards Corporate Social Responsibility (CSR)

6. Assessing Management
Analysis in this section
• Attitudes Toward Strategic Planning
• Attitudes Toward Risk
• Attitudes Toward Growth
• Management Attitudes towards Objectives
• Attitudes Toward Execution (Responsibilities)
• Training needs analysis
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

7. Business Track Record & Financial Analysis
Analysis in this section
• Previous Statements
• Budget vs. Actual
• Key performance indicators (KPIs)
• Financial Trends
• Net Cash Flow at Different Stages
• Financial outlook/forecasts
Benefits to be obtained from this section
• 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

8. Company Valuation
Analysis in this section
• Financial Forecasts
• Weighted Average Cost of Capital (WACC)
• Discounted Cash Flow (DCF)
• Trading multiples
• Peer comparable
• Change in value over recent years
Benefits to be obtained from this section
• 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

9. Reduced utility consumption & costs
Demand for eco-friendly goods
Green company reputation
Potential for investors
Grant schemes
Tax benefits
ENVIRONMENT
& SUSTAINABILITY

10. STEP 1:
PROCEDURES

11. STEP 2:
BENCHMARKING

12. STEP 3:
SOLUTIONS

13. Governance
Management
BUSINESS
REALITY
CHECK
Direction
Valuation
Financials
Sustainability
Economy

14. To improve is to change;
To be perfect is to change often.
Winston Churchill

15. Kurt Muscat, EMCS
Yasmin Schembri, AIS
BUSINESS REALITY CHECK
Assess – Implement – Improve