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Business Benchmarking

Have you ever wondered how the performance of your business compares to other companies in your industry? Are you operating as efficiently as other firms, are your margins in line with standards, are there particular expense items that are abnormally high - or abnormally low?

While all businesses are unique and have different operating and financial characteristics, you can gain significant insight into your business performance using business benchmarking. This insight can be invaluable to you whether you want to improve your profitability, obtain financing, or get the best price when selling your business.

What is business benchmarking?

Business benchmarking is the process of analyzing your businesses performance by comparing your company’s financial data with that of other similar-sized firms (in terms of sales) in the same industry. This is a powerful tool that lets you compare your business with those of your competitors and allows you to step back and see the big picture.

How benchmarking is helpful?

By comparing the performance of your business to that of similar firms, you can see immediately where your business is strong and where improvements need to be made. Benchmarking provides a valuable early warning tool to identify problem areas that can be corrected as well as areas where you can improve.

Additionally, lending institutions and investors are very interested in how a given business compares to its peers. By preparing a benchmarking report, you are preparing a useful tool for looking ahead, preparing for financing meetings, developing benchmark goals and for ideas in helping to reach those goals.

What if you are considering selling your business? Again, benchmarking can help you position your firm or business with like-kind businesses and determine if you measure up or exceed your competitors. If your business outperforms other companies in a market, it may command a premium price and benchmarking can illustrate this clearly. Conversely, if you are buying a business, using benchmarking tools can help you decide on whether to purchase the business and at what price.

We utilize BizBench™ software as a benchmarking tool. This software uses the database developed by Risk Management Association (formerly Robert Morris Associates), a widely used reference source. To request your report, call 978-263-7771.

Information in this material is for general purposes only. You should consult Sechrest & Bloom, LLC at 978-263-7771 for specific recommendations about your particular situation.

This article was supplied or updated on October 4, 2008.

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Overview Business Business Benchmarking Disaster Recovery Domestic Production Activities Deduction (DPAD) Health Insurance Options for the Self-Employed Home Office Rules MA and Single Member LLCs Personal Service Corporations Roth 401k and Solo 401k Financial Planning Individual QuickBooks Other		Business Benchmarking Have you ever wondered how the performance of your business compares to other companies in your industry? Are you operating as efficiently as other firms, are your margins in line with standards, are there particular expense items that are abnormally high - or abnormally low? While all businesses are unique and have different operating and financial characteristics, you can gain significant insight into your business performance using business benchmarking. This insight can be invaluable to you whether you want to improve your profitability, obtain financing, or get the best price when selling your business. What is business benchmarking? Business benchmarking is the process of analyzing your businesses performance by comparing your company’s financial data with that of other similar-sized firms (in terms of sales) in the same industry. This is a powerful tool that lets you compare your business with those of your competitors and allows you to step back and see the big picture. How benchmarking is helpful? By comparing the performance of your business to that of similar firms, you can see immediately where your business is strong and where improvements need to be made. Benchmarking provides a valuable early warning tool to identify problem areas that can be corrected as well as areas where you can improve. Additionally, lending institutions and investors are very interested in how a given business compares to its peers. By preparing a benchmarking report, you are preparing a useful tool for looking ahead, preparing for financing meetings, developing benchmark goals and for ideas in helping to reach those goals. What if you are considering selling your business? Again, benchmarking can help you position your firm or business with like-kind businesses and determine if you measure up or exceed your competitors. If your business outperforms other companies in a market, it may command a premium price and benchmarking can illustrate this clearly. Conversely, if you are buying a business, using benchmarking tools can help you decide on whether to purchase the business and at what price. We utilize BizBench™ software as a benchmarking tool. This software uses the database developed by Risk Management Association (formerly Robert Morris Associates), a widely used reference source. To request your report, call 978-263-7771. Information in this material is for general purposes only. You should consult Sechrest & Bloom, LLC at 978-263-7771 for specific recommendations about your particular situation. This article was supplied or updated on October 4, 2008.