Business improvement isn’t a destination. You’re never done. So to maintain the momentum and keep it sustainable embrace the philosophy of small continuous improvement. Instead of trying to make radical changes in a short amount of time, just make small improvements every day that will gradually lead to the change you want.
Each day, just focus on getting 1% better in whatever it is you’re trying to improve. That’s it. Just 1%.
The trick is for a business owner to know where to focus getting that 1% improvement. Benchmarking your business performance against industry peers can really help to highlight where the opportunity lies for you.
How does benchmarking work and what are the benefits?
Let’s take a real world example. Say the North Queensland Cowboys are the ‘benchmark’ for rugby league and you run a local club team that’s had a good season. What can you learn from the Cowboys’ financials and processes? The answer is plenty.
Let’s explore five very profitable reasons why – big or small – your business could benefit from benchmarking your performance.
It provides clarity and fresh ideas
Understanding the competitive landscape in your industry is so important. It allows you to take a step back and see where your business sits in your field. It presents the big picture of how you’re performing on some key metrics as compared others in your industry.
It lets you reach for the stars
Benchmarking creates an opportunity to explore how much more profitable your business could be if you were able to achieve the benchmark levels across all key metrics. Once you know what’s possible, you explore what needs to be done in your business to get there and can very readily calculate the benefits of making that happen.
It shows you what’s working – and what isn’t
Figures don’t lie. Use these insights to assess your processes and inform your strategy going forward. It’s all about percentages. For example, you can look at your staff costs as a percentage of your profits – how does this compare to your benchmark industry leaders? And what about marketing or operations? Where can you restore the balance by creating new positions, restructuring or training your staff to increase efficiency?
You don’t have to do it yourself
Work with your adviser if you don’t know where to start. We understand time is at a premium for business owners and the idea of gathering, inputting and interpreting your own data can be overwhelming. A Hanrick Curran adviser crunch the numbers, guide you through the process and devise a clear, actionable strategy to ensure you are focused on where to make your 1% improvements.
Please contact your usual Hanrick Curran adviser or alternatively Tim Taylor, Matthew Beasley, Tony Hunt or Stephen Brake on 07 3218 3900 if you would like to discuss the opportunity and benefits in completing a benchmarking analysis on your business.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.