Determine in advance what information you need.

Identify the key words or topics you are researching. List synonyms, considering how an online database might phrase things. For the travel industry, for example, you also might search on “tourism.”

Develop a standard research form to include with every valuation report. List keywords, industry name, Standard and North American Industrial Classification (SIC and NAICS) industry codes (available at www.osha.gov/oshstats/sicser.html and www.naics.com/search.htm, respectively), top public companies in the industry and leading trade publications.

Seek answers to the following questions:

What are the prospects for growth?

What are the industry’s dominant economic traits?

What competitive forces are at work, and how strong are they?

What are the drivers of change in the industry, and what effect will they have in the short and long term?

Which companies are in the strongest and weakest competitive positions?

What key factors determine success and failure?

How does the profitability of the industry as a whole compare with that of other industries?

How large is the industry?

Is the number of large players growing or shrinking?

Is merger and acquisition activity increasing or decreasing?

What are the barriers to entry?

Is the customer base growing or shrinking?

What key external factors (interest rates, inflation, new technologies, legislation or regulation) are likely to affect the industry?

Examine relevant sources of information.

Study the industry by consulting trade-association publications and Web sites. Check the resources on www.cpa2biz.com, the Encyclopedia of Associations from Gale Research and the American Society of Association Executives’ Gateway to Associations search engine at www.asaenet.org/cda/asae/.

Check the Form 10-Ks of the key players in the industry (www.edgar-online.com).

For economic trends, visit analyst sites such as Standard and Poor’s (www.standardandpoors.com), Integra Information Business Profiler (www.integrainfo.com), First Research reports (www.1stresearch.com), Thomson Research (http://research.thomsonib.com) and MarketResearch.com.

Register at Yahoo Finance (http://finance.yahoo.com/?u) to receive regular news updates on publicly traded companies you wish to track.

Evaluate the reliability of the information you locate by asking

Who are the authors of this information?

Are they the actual researchers or just editors?

Can you reach them to ask further questions?

What vested interests might they have?

How current are the data?

Are the sources of statistics documented?

Can you use the references that are cited to find more information?

Prepare an industry analysis to include in the valuation report. Relate the industry and economic trends you have uncovered to your valuation conclusion.

Adapted from Financial Valuation: Applications and Models by James R. Hitchner, John Wiley & Sons Inc., Hoboken, New Jersey, 2003.