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Better Business: Benchmarking your business

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

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