How to Make Your Business Even Better

Successful SME owners know that continuous improvements play an important role in the growth of their business. Your competitors can be an excellent source of inspiration.

Managers of large corporations routinely and systematically review the performance of other companies to assess their own performance and identify areas for improvement. Even if your business is smaller, the example of large companies can benefit you. Whether you do a formal or informal evaluation of your company’s performance, whether simple or complex,  a benchmarking exercise  can help you reduce your business costs, improve performance and introduce new ideas .

When you do your assessment, CIBC SME advisors and their team of specialists can direct you to relevant data sources and provide feedback that will help you focus on the most important aspects of your business.

Here are some suggestions to help you in the evaluation process.

  1. Determine Your Goals
    As with any business, the first step is to set goals. What aspect of the business do you want to evaluate? What are the main processes that affect performance? What, in your opinion, would be improved? The areas most often to be audited include cost control, inventory management, customer service, information technology and human resources.
  2. Determine the steps to be taken
    Decompose the general aspect to be studied by selecting one process at a time (eg, taking orders) rather than examining an entire system (eg, order fulfillment), which includes Several processes. This will give you more meaningful results and improve your chances of making a real and lasting change in a reasonable timeframe.
  3. Collect data
    What are the key factors you will need to consider in establishing your position in the chosen field?
    Figures are not the only data that merit examination. If you study product delivery, for example, you can review shipping times, the percentage of late shipments and customer reviews, in addition to actual shipping charges.
    If the area to be assessed is intangible, define measurable items that are related to it. For example, to assess employee satisfaction, you could control staff turnover and absenteeism.
  4. Evaluate the competition
    Now that you have established the basis of your company’s previous performance, you must look to other companies.
    In addition to comparing your business to your direct competitors, you may also get data from companies in other industries, but from a region similar to yours or serving a similar demographic market.
    There are many ways to get information. You can obtain quantitative data on standard aspects of the business (eg, revenues, cost of goods sold, and borrowing / equity ratio) from governments or industry resources.
    If you need more qualitative data, You can interview a company representative or use the results of a survey. Many companies are willing to provide information.
  5. Analyze the data
    The most important part of the analysis is to identify the main differences between internal and external data. You can use these differences as tags to determine which aspects to improve. Keep in mind, however, that each company is unique and that some discrepancies may simply reflect a particular concern or priority of your company.
    For example, your production and staffing costs may be twice as high as those of your competitor, but if your primary intention is to offer a higher quality product, these costs may well be justified.
  6. Find the solution
    The results obtained will give you the basis on which you can make the necessary improvements. Either they will conceal the solution as such (eg change vendors to reduce costs), or they will highlight a particular aspect requiring further research or creative brainstorming.
    Always look at the situation as a whole. For example, implementing a faster ordering process can result in lower costs, but it may limit your ability to build relationships with your customers.
  7. Establish Processes The
    following are some key principles governing the process establishment phase:
  • Set Clear and Realistic Goals
  • Evaluate the impact on other aspects of your business
  • Set target achievement deadlines
  • Put the plan in writing
  • Communicate the plan to your staff

After the deadline, review your baseline data. You may well see that the smallest improvements can lead to significant gains in efficiency and cost-effectiveness.

Discuss your business plan and business objectives with your CIBC Small Business Advisor.

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