Australian Bureau of Statistics data estimated in 2001 there were over 1.2 million small businesses operating within the Australian private sector. That’s a lot of competition. So what can SMEs do to ensure they remain competitive within the marketplace? Benchmarking is a great way for SMEs to measure themselves against their competition in order to improve internal processes and ensure they stay one step ahead of the game.
The first step for any SME is to determine key performance indicators (KPIs), which is how a business defines and measures progress towards its goals.
For an SME this may be closing on 50 percent of walk-in sales or increasing business related phone enquiries by 30 percent. The indicator must be an amount that can be evaluated at the end of benchmarking to determine the success of the campaign.
It is important to remain realistic in setting KPIs as these should be levels your organisation can realistically achieve in a set amount of time. If in trouble, remember SMART – Specific Measureable Achieveable Realistic and Time constrained. These principles will ensure your organisation determines KPIs relevant for business success.
The next step is to benchmark your KPIs in relation to other businesses within your sector. This information is often compiled by external agencies which your business can have access to for a fee.
This benchmarking demonstrates who the key performers are within your industry and the areas where your business can make crucial changes to improve profitability, reduce costs and increase efficiency within the workplace.
Benchmarking can be an extremely useful tool in determining the strengths, weaknesses, opportunities and threats within your local business environment – this foresight could help you meet future challenges and capitalise on benefits.
After the benchmarking process is complete you must determine how your business will achieve the KPIs and become a leader of the pack. Cost, time and resources are all factors to consider before implementing any campaign activity so make sure you review what you have to actually spend to assist in planning your campaign.
There are three easy and cost effective options to consider that may help you heighten your business activity. They are as follows:
1. Create relationships with your local newspaper editors and radio managers.
Establishing a solid business relationship with local media is a good starting point through which you can generate free media awareness. If your business has a promotion coming up or is active within the local community don’t be afraid to use these contacts and let them know – they might just have some free space or airtime that needs filling.
2. Reward your returning customers.
It doesn’t have to be a loyalty campaign or anything extravagant it could be as simple as a smile and remembering their name or giving them five percent off the next time they come into the shop. It’s the little things that count and positive impressions are one of the best ways to ensure customers come back to your business.
3. Give back to your community.
Being an active participant in local events not only demonstrates your commitment to helping your community but is also an opportunity to socialise and get to know new and old customers. Having a good rapport with clientele is a strong foundation any SME should be looking to create.
Benchmarking can also prove a strong investment when assessing your current business activties. Travel is one of the major expenses of any business operation and using benchmarking to assess how you can save will ultimately place your business in a better position.
– David Padman is the general manager for Travelscene Corporate (www.travelscenecorporate.com)
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Benchmarking to grow your business