Benchmarking compares your business to the rest of the market and provides context for competitive analysis. There are two main stages – gathering external data and assessing your position.
Gather market information as follows:
- From the trade press and specialist research projects
- Provider and supplier analysis of the market – they will include useful data
- Talk to competitors about their businesses
- Ask specialist advisers who support the sale of advisory practices
- Purchase specialist analyses from sector experts
- Talk to new joiners about previous employers
- Use contacts to gather an overview of the market and competitors.
Be prepared to share some of your non-confidential experiences or information as part of the process.
Second, work out where your business stands against what you have found. Categorise this using the main drivers of business value:
- Financial profile, particularly profitability and secure recurring revenues
- Clarity of service proposition and its delivery
- Number, profile, value and types of clients
- Profile of advisers by specialisation, age, qualifications, infrastructure, including effectiveness of processes, IT applications and use of technology
- Strength of brand and any specific attributes valued in the market or by key client groups
- Management effectiveness, including risk management and compliance.
David Shelton is the author of “The Business of Advice” book and website www.businessofadvice.co.uk