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Business Drivers

A business driver is a resource, process or condition that is vital for the continued success and growth of a business. A company must identify its business drivers and attempt to maximize any that are under their control. There are always outside business drivers that a company cannot influence, such as economic conditions or trade relations with other nations.[1]


Identifying and monitoring the key drivers of your business is critical to boosting profitability. A key business driver is something that has a major impact on the performance of your specific business. A whole range of internal and external factors affects the performance of every small business. The secret is to focus on a handful of key drivers that:

  • reflect the performance and progress of your business
  • are measurable
  • can be compared to a standard, such as a budget or last year's figures, or an industry average
  • can be acted upon

The range of business drivers varies enormously from business to business. For example:

  • sales leads in a capital goods or service business
  • sales per square meter in a retail business
  • machine downtime in a factory
  • 'first time fix' in a maintenance business

Even direct competitors may use different drivers to improve their business performance. For example, prime location is not a key driver for an internet-based business selling computer parts, but it is for a 'bricks and mortar' competitor that relies on well-located retail stores to attract foot traffic.[2]


References

  1. Definition - What does Business Driver mean? Techopedia
  2. Identifying your Business Drivers NAB


Further Reading