It can be hard to know exactly what your competitors are doing, especially when you are a small-business owner focused almost exclusively on growing your enterprise. However, taking the time to lift your gaze from everyday concerns and looking at what your competitors are doing can certainly help.
One way to do this is by benchmarking your performance against other firms. These insights can be hard to find, but they can also give you an unrivaled perspective on how the competition is performing and where you can improve. To achieve this, here are three steps to get your started.
1) Understand what you want to benchmark
There are many aspects to every company that will impact its position in the market and that might be worth comparing against others.
To find the right metrics for you, think about the points that set your company apart from your competitors. If your unique selling point revolves around high-volume manufacturing for example, then efficiency will be your biggest focus.
Once you know exactly what you want to benchmark and how this relates to your commercial objectives, the next step is to use an appropriate avenue to gather this information.
2) Finding the right source of knowledge
Now that you know why you are trying to benchmark your performance, the next step is to gather information that will help you to understand your company's performance. Fortunately for businesses, there is no shortage of areas where they might be able to receive this information.
Start with an professional bodies you are a part of. Many of these bodies publish information on member businesses, giving you an idea of what you're up against. You will also have a good idea of which companies are included here based on existing membership.
Market research firms will also publish studies on specific industries that you can compare your company against. While these reports can be expensive, they often combine data with expert insights that might make them worth paying for.
Finally, there are a number of free benchmarks that can help you measure your performance. Likes and shares on sites such as Facebook can be a starting point to compare against competitors, while Google Analytics will let you benchmark your website against aggregated comparisons to see how it is performing.
3) Updating your benchmarks over time
Today, every industry is seeing widespread changes, as people look for new ways to do their work better. With industries shifting quickly, your benchmarked information can quickly become out of date.
In light of this fact, you may think it isn't worth benchmarking your company. However, this isn't the case. As the pace of change in the business world increases, it's more important than ever that you have the tools you need to see where your competitors are going and how you can stay ahead of them.
To do this, continue to update your benchmarking efforts every time you embark on a new project. If your business objectives shift, consider how this will affect the assumptions you have made about your industry and how it is transforming. Likewise, if your competitors increase or decrease in number, your existing figures might no longer be relevant.
Ultimately, benchmarking your company is about understanding where you have room to improve and the direction your sector is heading in, making it a core part of your strategic planning. That's why this information needs to be kept up to date at every stage.
Once you know why you are undertaking this benchmarking, have a plan in place to gather this information and a long-term strategy to keep it up to date. From there, it won't be long before you see the results in your organisation's performance.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].