One of the best tools for managing your performance is benchmarking. When you benchmark your company, you are comparing it to other companies to determine growth, expansions, and increases in performance and production.
However, there are challenges to benchmarking your company. Continue reading to find out how you can avoid the 5 biggest mistakes small businesses make.
1. Comparing Only Against Competition
There’s more to benchmarking than comparing your business to your competitor’s. You should look to other industries and widen your lens.
This is a great way to discover new technologies and products and form potential strategic partnerships. Widening the lens of your benchmark plan will give your company the best chance of outperforming the competition and becoming an industry leader.
2. No Clear Goal or Plan
As with anything, you should have a clear plan for benchmark analysis. This should include goals. What exactly are you looking to get out of this analysis.
Keep in mind, what works for one company or organization may not work for yours. This is again where widening the lens is critical. You’ll capture data relevant to your company and effectively dismiss what doesn’t work for you.
As an example, a competitor may increase performance through new software, however, through your own benchmark analysis you discovered this article at insidehpc.com.
Instead of new software, you discovered the secret to your performance issues is new equipment.
3. Only Looking Backwards
When conducting surveyors and analyses, it’s natural to look to the past for data and to make predictions about the future based on that. But, there’s more to benchmarking than what others who have come before have done before.
You should also look at the projections you have made for your company in comparison to other companies. What predictions have your competitions made? How are they currently doing?
4. Inappropriate Sampling
When collecting your data for the analysis, you’ll need to pay close attention to your samples. First, you’ll want an appropriately sized sampling pool. Too small and your data won’t be sufficient to provide any meaningful information. And, a sample size too large will provide you with more data than what to do with.
You also need to account for sample errors. To account for sampling errors, you should use statistical comparisons. This will help you tell the difference between a real and meaningful change. Or a random act of the business gods.
5. Becoming a Clone
Imitation may be the sincerest form of flattery, but try not to turn your business into a clone of another. The first of many reasons is the legal trouble you could find yourself in with the business whose everything you cloned. But there’s already that business and you have your own business.
Let your uniqueness be your strength. Don’t lose your own business or brand identity in a sea of comparisons. After all, it’s your business, and it should remain that way complete with its own unique experiences.
Remembering 5 Biggest Mistakes Small Businesses Make
Benchmarking can give you a clear and precise picture of how your business is doing by comparison. But many companies fall into the aforementioned pitfalls like becoming a clone of another company, having no goals or plan, and a single-minded focus on the competition.
The key to avoiding these 5 biggest mistakes small businesses make is to incorporate your benchmark analysis into your overall business strategy. This will provide focus.
Check out the tools section of our blog today to learn more about increasing your business’s performance today.