How does your company measure up?
No matter how successful your business has been in the past, you can probably do better. And if you've been struggling to keep your head above water, there's certainly room for improvement. So how can you gain ground on the competition?
Try the process known in business circles as "benchmarking." This is a strategic technique for comparing various aspects of your business to the top marks in your particular industry or profession. Then you can play "follow the leader" by emulating the best practices in those areas where you need to improve.
Benchmarking first gained wide acceptance in the manufacturing sector. For example, suppose a manufacturing company determines that it can produce only 100 widgets per hour as opposed to 500 widgets an hour produced by a competitor. This indicates a need to improve the company's widget-making process. The same analytical tool may be extended to virtually every line of work.
Be mindful that benchmarking is not a one-shot deal. It is an ongoing process that requires you to continually challenge yourself to improve performance.
What aspects of a business might benefit from benchmarking? Naturally, this varies according to industry, location, and other factors, but the following areas are generally worth examination:
* Costs of producing goods or providing services.
* Length of time needed to design and market products.
* Procedures used in production activities.
* Personnel management procedures.
* Sales department activities.
* Marketing and advertising.
* Factors influencing public opinion about your products or services.
Benchmarking can create results where it counts - on the bottom line. Contact our office if we can assist with evaluating your business practices.
Before you invest in any business, it's always a good idea to discuss the proposed venture with your advisors. If you would like assistance with evaluating a business opportunity or with legitimate tax planning, please call our office.