How Do I ‘Benchmark’ a Business? Three Mindsets for Advisors

Jul 22nd, 2019

How do i benchmark

 

At different stages during the process of Benchmarking a firm, your mindset needs to change. Here are the key stages that you’ll need work through as you help a client to devise concrete plans for a better, stronger business:

1. At first, your role is essentially a clerical one: converting the financial data about the client into our formats. So we’ll focus on some of the procedures that will help you to get that information entered in the most accurate and quickest way possible.

2. Next comes a diagnostic role where you ask “For this industry sector, and this business in particular, where will I find the most relevant average? What are the figures telling me about this business?”. So you become an analyst, thinking about the results, the possible causes – and then some solutions. “What are the differences? And are they strengths or weaknesses? How can they be fixed?”

3. Third, you become a communicator and a motivator. You’ll need to demonstrate quite clearly that there is a problem, and that you can help to devise the corrective strategies that clients can implement (and possibly with your involvement over a period of time). In that way, the business owner decides that they really do need to improve parts of their business and will be motivated to do the necessary work – the ‘hard yards’ behind the scenes to change policies, procedures and practices.

At the end of the day, the diagnosis arising from these benchmarks has to result in action. If we treat Benchmarks as just a series of numbers then we’ve really missed the mark. We need to use the numbers to get the client to take action – because it is only that action that will fix the business and deliver better results in the future. And the best improvements will keep delivering these benefits over a period of time.

See how easy it is to benchmark a business today with the Benchmark Suite.

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