Benchmarking in the Financial Success Roadmap
Last week we discussed the Financial Success Roadmap which is also known as a budget. The last step in the financial success roadmap is benchmarking. Benchmarking is very powerful and a key to financial success. It is used in combination with budgeting to improve financial performance. Benchmarking is simply comparing your business’ financial performance with other businesses in your peer group.
Benchmarking helps identify which expenses or costs are too high or too low so that you can identify the reason for them and to come up with a solution to fix it if needed. You will look at your budget to determine which of these expenses need work.
The ultimate result of benchmarking is more profit and cash flow if you can identify areas that can be improved and implement the solution to improve expenses and costs.