All business owners would like to make lots of money, and be very successful. Unfortunately, this doesn’t happen all by itself. Like so many other worthwhile things in life, it usually takes hard work.
Switched-on business owners look for ways and means of improving their business all the time. They are open to most things that could have a favourable impact on their business and give them the competitive edge they need. One of the best ways to achieve this is by benchmarking.
Large organisations have now been benchmarking for many years. For too long, smaller business owners have overlooked this practice. There isn’t any reason why small businesses should not benefit from this same practice and reap the ensuing rewards.
What is benchmarking?
Benchmarking is simply the process of comparing your performance against another’s, and adopting and adapting any better methods or procedures. This is entirely natural, and people do it all the time without realising it. For example, when one golfer asks another for help with his or her swing, or grip on the golf club, that person is benchmarking!
In business, benchmarking is assessing other similar types of businesses or organisations in order to identify any better operating procedures, work practices, or other factors that could be adapted to improve your business.
Benchmarking sounds intimidating but it is, in fact, a logical process. All you need to do is first carefully assess your own performance to identify any strengths and weaknesses. Then you compare your business with other similar businesses to see whether these businesses have achieved better performances or practices. These can then analysed to determine whether adapting them will improve your business as well.
What can be benchmarked?
All aspects of a business can be benchmarked. These can include the key performance indicators, such as profit margins, employee costs, or stock turnover rates, or they can involve better marketing practices, or product or service ranges. Choosing what should be benchmarked and what, if anything, needs to changed once you have benchmarked your business, depends on the particular type of business. Each business needs to assess its own performance and determine what needs attention.
What matters is that you realise that you need to make the most of your business, and are willing to make any effort to start the process.