We say that business improvement without benchmarking is like playing billiards in the dark – even if you sink a ball, you don’t know if you sunk the right one. Benchmarking switches the lights on and ensures your business goals are relevant, competitive, and effectively translate your vision to the marketplace.
Many businesses implement benchmarking methods to ensure their growth and operational targets are cutting-edge. What metrics you analyse and whom you benchmark against is largely dependent on the nature of your business and the types of goals within your business plan. This is where even seasoned business people can get off track by focusing on the wrong sets of data.
So whether you’re a newbie or a seasoned pro, reviewing the fundamentals of benchmarking will keep your business planning sharp and effective.
Step 1: Identify Your Goals
Benchmarking is very useful when you have a clear understanding of your business goals, and provides a quantitative way to justify (or correct) your target metric for your goals (i.e. reduce waste by 20% or increase sales by 50% per annum). Few people like impossible targets, especially when it comes to sales resource allocation. This way you can set realistic goals for you and your staff, and get the satisfaction of achieving them together.
Step 2 – Make the Right Comparisons
You may want to understand your performance when compared to a few key competitors or a broader set of industry trends. Which one is more relevant depends on numerous factors, including your current position in the market and the scale of your business. That’s where a business advisor needs to steer the direction of the benchmarking inquiry process to ensure you divulge relevant and useful comparisons that align with your business goals.
Whether you desire to undertake financial benchmarking or operational, there are numerous organizations that you can use to obtain the right data sets such as data.gov and other government bodies. Also explore what benchmarking tools are available to you through industry associations. If you have the time and skill you (or a team member) can undertake your own comparisons.
Step 3 – Ongoing Review
Because most business environments are evolving, it’s important to note that benchmarking is not just a one-off process, but a continual cycle of feedback to ensure you’re well-orientated with respect to your market. As the rate of innovation increases, keeping ahead of the competition requires frequent review of what your competition is doing.
Here at UHY, we have a philosophy of long-term relationships with our clients. When we sit down with our clients and help establish goals we’re with you every step of the way from benchmarking your business against the right comparison right through to implementing and reviewing operational changes that ensure you progress toward your goals. After all – the best information on the market is only as valuable as your capacity to interpret and adapt in response to it. That’s why we see benchmarking as part of a broader approach to Business Improvement.
Our analysis track down the most recent and granular data available on your competitors, and ‘deep dive’ into the data to give you the most comprehensive understanding of the competitive landscape, and provide actionable recommendations on realistic target setting and strategy on how to implement the right changes to meet those goals.
If you have questions about your business performance, talk to us – our friendly business improvement specialists are here to help you achieve your goals.
Dean Vane – D.Vane@uhyhnseq.com.au
Lauren Steinheuer – L.Steinheuer@uhyhnseq.com.au