Member Article

How well does your business measure up?

Do you know how your business is performing compared to other businesses? Wouldn’t it be useful to be able to plan the development of your business and identify some priorities based on this kind of information? Carol Groombridge from Business Link looks at how benchmarking can help you become more productive.

What is benchmarking?

Benchmarking is a way of making comparisons with other businesses so you can better understand your own current performance. You can use this information both to identify opportunities for your business or areas where you may need to improve and develop appropriate strategies for a more successful future. Your comparisons might be against businesses in your sector or those of the same size and with the same objectives as yours. They might be against an established market leader, your main competitor or a hypothetical best-practice model.

Deciding which areas to benchmark is important

Benchmarking can help you assess your performance in almost every area of your business. However, it’s most useful if you only benchmark areas where improvement would bring tangible and measurable benefits. To identify where benchmarking would help, first assess the needs of your business. Look at the “hard” facts on your businesses performance, such as the number of successful sales, or amount of product wastage and also “soft” data on whether you are satisfying staff, customer and supplier needs and expectations. Questionnaires are a good way of collecting this information. Paper questionnaires make it easy for respondents, but an electronic format - on the Internet or via email - can increase the reach of the survey. Make sure the questionnaire will deliver the information you are seeking. Closed questions are easy to code and score while open questions can provide greater detail but are harder to code and score.

Using the information

Benchmarking will ultimately prove a waste of time and money unless you’re committed to acting on its findings. This means benchmarking is more than identifying areas where your company is underperforming. It’s also working out and implementing changes that can boost performance. You should remember, however, there may be perfectly valid reasons for poor benchmarking results. In other words, don’t interpret every poor finding as a call for change. Whatever decisions you make, it’s essential to review your action plan at least annually. To gain the most from benchmarking you should think of it as a process of continuous improvement rather than a one-off exercise.

For Business Link services in your local area, please call: 0845 600 9 006. For further information from Business Link, visit: www.businesslink.gov.uk Business Link services in the North East are supported by the European Regional Development Fund, through the Government Office for the North East, and One NorthEast.

This was posted in Bdaily's Members' News section by Ruth Mitchell .