When someone asks you, “How is your business doing?” Do you really know how to answer that question?
Most business owners only tally their business success based on the profits they are making in various quarters. But how much revenue is your competitor earning and are you at par with them? Most small business cannot answer this question as their growth benchmark is set based upon their previous revenues.
To succeed in the industry, your success benchmark should be based on the revenues of your competitors. You need to compare your business with other businesses in the same sector only then will you be able to assess the health of your business.
For e.g., your company made a profit of 5% last quarter whereas the industry norm was 4% hence your company excelled in that quarter. But, in the current quarter, your company made a profit of 7% as compared to the industry norm of 8%. This means your company did relatively well when compared to last quarter, but it did not cross the industry norms which is a red flag.
Most business owners do not benchmark based on data of competitors because they assume they cannot arrange for the data but if you are a smart business person, there are ways in which you can get hold of this data and work to achieve the industry norms.
Here are a few ways in which you can find benchmarking data of your business;
1. Search Industry Directories:
A few industries have reports of different companies in a sector readily available in directories which can be used to compare with your companies’ profits to see if you are doing well or need to improve your strategies.
2. Investing in Market Research:
Market research is available for every industry readily, you just need to find it from the right source. You must be willing to spend a little but if you do, you will find a comprehensive review of how all the companies have done in a financial year statistically.
3. The Poll Results from the Industry Association:
There are various associations which conduct polls to understand the market where businesses disclose their revenues anonymously. Through these poll statistics, you obviously will not be able to figure out how your individual competitors have performed but you definitely will get an average figure of the industry and compare where your company stands.
4. Asking for Data from Other Owners:
This may sound like an unconventional way as to why should other owners disclose their financial records, but it is possible if you form an alliance with a business owner who is located in a different city hence not in direct competition with your company. Exchanging records will help both of you understand how you are fairing in the industry,
What Should You Do If You See Red Flag?
If the data shows that your business profits are tanking, you should start to mend the gaps immediately by improving your marketing and taking customer feedback to improve the products. You need to fill the industrial profit gap in the company to succeed hence your profits should always be more than your expenditures.
Many businesses take extra steps to fulfill the benchmark by investing in another short time side business such as bitcoin trading which can give quick returns to fill the profit gaps. Use a reliable bitcoin trading website such as https://de.the-bitcoin-profit.com which will compute complex market trends through its algorithms and generate accurate future market trends for you to profit from.
Most businesses flounder from time to time, you do not have to panic. Just be prepared from the beginning from such a situation to arise and if it does, get into loss management mode by investing in the right areas which will improve sales, cutting the ones which do not generate revenue and learning from the previous failure mistakes. If you put in the right efforts, your business will shift from floundering to flourishing again.