Three Common Small Business Benchmarks
Benchmarking is the process of comparing your operations against other companies, and it is a powerful tool for helping you see what you’re accomplishing.
Without proper benchmarks, it can be difficult for small business owners to measure how well they're doing or see areas where they need to improve. Benchmarking provides a point of reference for evaluating what’s working well and what’s not. Here are three common benchmarks for small businesses.
1. Individual employee performance
Employee performance can be benchmarked internally, by setting goals for employees in each department to achieve. This is effective for tracking progress as well as showing areas where more training might be needed.
2. Customer service
Benchmarking customer service initiatives against the customer service provided by a competitor or by an industry leader can help raise the overall level of service provided by your company.
3. Financial Performance
Financial benchmarking allows you to measure things like cost per unit, productivity, sales or other elements that you can run a financial analysis on and compare with others to assess your overall competitiveness, efficiency and productivity.
If you need help identifying which benchmarks are relevant to your business, or if you want to find benchmarks in your industry, start with a business or industry association. Ask them for information about your industry that you can use to establish your own benchmarks.
Using the information gathered through benchmarking can help you identify where you need to improve to help your business cut costs, boost productivity, and streamline processes – all of which can translate into better cashflow and more profits.