In the first instalment of our growth advisory services blog series, we outlined what business consultancy is and how it can benefit e-commerce sellers. There are a number of steps in the advisory process, and the first of those is company benchmarking. AVASK takes pride in doing a thorough job of evaluating our clients’ businesses because this allows us to offer them the best possible solutions to their problems.
This post will dive into the initial step, which is benchmarking the client’s business. It will walk you through what benchmarking is, the most common types, and AVASK’s approach to this critical fact-finding stage.
What is benchmarking?
Simply put, benchmarking is the use of key business metrics to paint a picture of where the organisation can make improvements to enhance its performance and standing in its industry. This often involves comparing these metrics to other areas of the business, competitors, peers, and geographic regions.
Depending on the depth to which the investigation goes and the state of the business’ current records and documentation, the process can take anywhere from weeks to months. While expediency is important, the key factor is in taking the time to do the evaluation correctly and precisely to better inform decision making in the future.
Types of benchmarking
The four types of benchmarking one typically encounters are internal, external, performance, and practice. Each of these looks at a particular area of the business or its industry, providing unique insights.
Performance benchmarking is usually the first exercise businesses undertake to build their strategies. It involves looking at quantitative data such as measures or KPIs and analysing it to get an accurate picture of the business’ current output.
Practice benchmarking focuses on how a business performs its daily activities. So the emphasis is on people, processes, and technology the business employs. This is useful in identifying gaps where better procedures could tighten up a company’s behaviour and make it more agile.
Internal benchmarking is useful for identifying obstacles by comparing multiple areas within a company that have similar KPIs or practices. It compares these between different departments, programs, or geographies. If one area is succeeding while another struggles, seeing what differs between the two can be enlightening.
Lastly, external benchmarking is closer to what most people probably think of when they think of analysing a business. This process compares the metrics and operating procedures of two or more organisations. Because of its reliance on information from other companies, this exercise can require significantly more time and effort, but the payoff can be equally high.
AVASK’s approach to benchmarking your business
We begin our benchmarking process by scheduling a series of calls with the client. These are typically around two or more hours long, providing an opportunity to talk about every aspect of the business. Things that are typically covered include:
- Locations: offices you staff, places you store inventory, any other places that form a part of your enterprise
- Staff: which departments are understaffed/overstaffed, training, experience levels, and if employees are being allocated in the most efficient way possible
- Resources: funding, equipment, vehicles, partnerships, anything else the business can rely upon
- Home region performance: how the business performs in its home country or marketplace
- Goals: what milestones you want your business to achieve
This gives our consultants a deep understanding and insight into your business and how it operates, as well as how you envision it performing in the future. From this, we are able to look at the more technical aspects of how the company operates, such as finances, processes, and technologies.
The benefits of business benchmarking
No matter what stage you are in your entrepreneurial journey, taking a moment to inventory your business and analyse what you could be doing better is always beneficial. The self-awareness that comes with benchmarking a business gives sellers an advantage over their competition.
At AVASK we believe that knowing your business is the key to running your business. That is why we are proud to offer robust benchmarking as part of our growth advisory services. With our years of diverse experience and multilingual team of dedicated specialists, we help countless e-commerce sellers realise their dreams.
If you have any questions or concerns about benchmarking your business, get in Contact with us. Our team of e-commerce experts can assist with that and a range of other E-commerce Growth Advisory Services.