Benchmarking Techniques

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Growing and running a successful business is possible, in large part, due to the application of benchmarking techniques. Benchmarking allows business managers and owners to gain perspective on the state of the company and set measurable goals for the future. More specifically, in-house business assessments (internal benchmarking) and outside company comparisons (external benchmarking) help managers determine the strengths and weaknesses of the business and how it can effectively grow.

Identify areas where you wish to see change in your business internally, competitively (between direct competitors) and functionally (within the whole of your industry). Choose a year-end goal, for example, on what you intend for company profits, staff size and product output.

Look over company data for the previous one to five years. Examine how and when, for instance, profits have increased and decreased. Compare respective high and low marks in profits in February and July 2011, for instance, to data showing the size and efficiency of your staff and the quality of your company's products during the same months. Review employee progress reports and customer service feedback forms, for example, in conjunction with business account statements.

Find causes and effects of highs and lows of your business. Compare internal data reports to determine the answers. Identify the months with the lowest profit margins in your company, for example, and note that low profit months were also months where staff size was substantially reduced. Make notes on your findings and what may turn profits around -- a steady number of effective staff members, for instance.

Discuss preliminary findings with your managers and staff. Hold meetings or hand out feedback forms to help your company obtain in-house information regarding, for example, what your staff deems both positive and negative aspects of the company. Analyze the feedback that employees tend to quit in the month of July, for example, because your company does not offer sufficient summer vacation time. Keep lines of communication open between all levels of staff, to ensure effective and efficient cooperation and productivity.

Find areas of potential growth and opportunity. Consider revamping your vacation policies, for example, to help retain a steady and effective staff. Compare your company's current data and future goals against the mission and business practices of sister or competing companies, to find effective ways for your business to improve.

Set short-term and long-term goals. Short-term goals may range from 90 days to one year, whereas long-term goals may range from one year to 10 years. Ask yourself and fellow company directors: Where is our company now and where do we want to be? What can we take away from our data findings? How can we affect positive change in both the short and long term? Implement policy changes in accordance with your findings. Adjust your policies or business practices as necessary, once the end date for each goal is met.