Share what you know with millions of people
Focus is the best place to turn what you know into remarkable content
0
How do you compare your business to other businesses?
If you run a business, what do you use to compare your business to others in the same industry, space, size range, etc? (Do you compare your business with others in the first place?) What metrics are most relevant or useful when comparing your business to others (of the same size range)? i.e. overhead costs, insurance policies, reporting capabilities, advertising metrics, etc. What else?
Events
- Dos and Don'ts of Small Business Marketing May 29 @ 11 am PT
- Lead Nurturing 202: The Next Generation May 31 @ 11 am PT
- The Tricks to Paid Media June 6 @ 11 am PT
- Display Advertising for Brand Awareness June 20 @ 11 am PT
Related Activity
2 Answers
Comparing your business to others is a good idea but hard to do well. To the extent that your business is unique, you may not be able to really find good benchmark companies. Even if you do, the differences in location, competition and other factors often make comparisons difficult. On the other hand, if your business is fairly standard, such as an office supply store, there may be trade associations that publish data that can be quite useful. In such a case, revenue per square foot and similar measurements may indicate whether you are using your space efficiently.
In the absence of good metrics, which are seldom available for small private companies anyway, I suggest that you consider establishing your own target metrics for gross profit, cash flow, operating expenses, returns and the like and track them monthly. Your targets should be reachable but with a stretch, i.e. you will have to be innovative and work hard to get there. This can provide some incentives. You can also look for a net income return on a monthly basis. If you are making an acceptable profit from your business, this is a very good sign. You will need to close your books monthly and likely use a financial model to obtain the metrics you need.
I urge every business to focus on their competition, as you can be sure that the competition is watching you. Learn about them in any way you are able, adopt their good ideas and guard yours. Keep in touch with their product selection and pricing and make sure that your business is not losing market share without taking action. Always view your own business as objectively as you try to view the competition, acknowledge when competition is better than you are and devise plans to offset this. Avoid denigrating the competition or engaging in fruitless price wars to gain market share.
Lots of luck.
What a great question, Jessica!
Any business that does business online should become familiar with Compete.com if decision makers at that business aren't already visiting the site regularly. It provides interesting information about traffic to almost any business' Web site and allows comparison with other sites. The data can be a powerful spur for discussions related to e-commerce and competition.
It's also important to follow what people are saying about your business and your competitors on Facebook and Twitter, at least. Brian Solis pointed out at the Focus Interactive Summit "Mastering Lead Management" that Facebook has more than 500 million users, while Twitter has more than 105 million registered users posting more than 65 million tweets per day. Even if your company has no official presence on Facebook or Twitter, the odds are good that some people are talking about your company, your competitors or both online. Following those conversations will help to hone competitive comparisons. (To view the Summit on demand, go to http://focus.com/c/B2E/)
Those are two relatively quick, easy and inexpensive ways business decision makers can compare their companies to others -- I'm eager to see answers from others!
Answer This Question