Benchmark Your Business
Have you ever wondered how your business is performing? Or how your business is going compared to your competitors?
Benchmarking your business can assist in providing some answers as it is a way of measuring your performance against similar sized businesses in your industry. Business benchmarking will identify areas of improvement within a business, identify where the business is doing well and provide opportunities for planning the business to move forwards in the right direction.
There are many ways to benchmark a business; you could buy expensive financial benchmarking data systems, contact industry associations to see if they have the right information for you or you could do the research yourself. As Rubiix deals with many businesses in many different industry types, over a number of years we have developed a process that can benefit you when benchmarking your business. This time of the financial year our business clients are reviewing their financial statements and performances and working with us around tax and business planning. Throughout our planning discussions we are working with our benchmarking system; we have access to industry benchmarking data that assists to compare the client’s business income, expenses and profitability against industry averages. With this beneficial information, our clients are making better-informed decisions that have a positive impact on their business.
Our business industry benchmarking discussions are helping our business clients see;
- Where they can reduce costs
- Assess productivity
- Identify opportunities for improvement
- Highlight opportunities for making business more competitive
- Forecast the impact of change
As an example, assisting our clients to see how much they earn and how much they spend on items such as advertising, rent, staff, training and other expenses in comparison to their competitors, they may find they are spending too much on rent and may consider moving or look to renegotiate a lower rental rate.
Rubiix’ top five reasons why clients should benchmark their business:
- Benchmarking allows you to compare your business against top performers in your industry and see why they are so successful. You are then able to analyse the key performance indicators (KPIs) of these successful businesses and put in place plans to emulate them.
- Benchmarking enables you to identify the strengths and weaknesses in your own business. Without this insight, you could be traveling blind and making business decisions without the right information.
- Benchmarking provides objectivity, so that you can take an objective view of your business. It’s difficult to do this otherwise – you may be just too close and emotionally invested in your business so making it difficult to stand back and be unbiased. The most successful businesses make realistic assessments about their performance.
- Benchmarking allows you to understand personnel productivity in detail, and subsequently, set reasonable expectations for staff productivity. There’s no benefit in setting expectations that simply can’t be met. Likewise, to set expectations that are too low to drive real value in your business makes no sense.
- Benchmarking can also help you assess performance in the area of finance. A wide range of expenditure questions can be answered to help you make decisions – on anything from average industry salaries, to the cost of office supplies.
Like any financial management activity that’s worth doing, benchmarking takes a little effort. But outside help is available. If done right, benchmarking holds the key to future prosperity for you and your business.
Benchmarking is a process of continual improvement. Once you have implemented changes, you should benchmark your business again to see the results. It will tell you what is working and where you can still improve.
If you are a business owner and want to take more control of where your business is headed, contact our office today to discuss benchmarking your business and see the benefits.