How to carry out your own benchmarking
With Business LinkIs it important to know how your company compares to others? Should it make any difference to the way you go about your business? How could benchmarking help you become more productive and improve your performance? Elaine Inglis from Business Link looks at how to carry out your own benchmarking.The more information you have about how your business performs compared to others, the better equipped you will be to take steps to make critical improvements that help you stay one step ahead. Measuring your performance against competitors across many areas, from cost and pricing to product and services, will help you establish a realistic understanding of your strengths and weaknesses. This in turn will enable you to identify what changes you may need to make and where your business might benefit from external help to increase your productivity and competitive advantage.Benchmarking can be a straightforward and simple exercise that you can conduct without outside help. You can benchmark internally by comparing different departments within your own business. External benchmarking uses industry norms to compare your business against other similar businesses. To do this, you can get published statistics on your sector from, for example, your trade association or industry surveys. The internet can also be a useful source of statistics.Alternatively, you might join forces with other businesses to conduct your own benchmarking exercise. As a first step, identify and approach three to six businesses which are of a similar size and structure and have similar objectives to your own. You then exchange simple operational data by telephone or a postal questionnaire. It’s a good idea to draw up a benchmarking agreement to cover how this data is used. Given that the participants will be competitors, there may be some sensitivity regarding the exercise. Businesses need to view it as an opportunity to learn from one another and to improve their own processes, not to force every participant’s process into the same mould.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.