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Analyzing Your Company’s Strengths and Weaknesses With Benchmarking

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In today’s world, there is an overwhelming amount of financial data and analytical tools available to you and your business. This can often make it difficult to determine what information is useful. Benchmarking solves this problem.

Benchmarking is the process of comparing your company’s financial performance to an industry or peer group average. It provides new insights and serves as a key tool when making executive decisions.

Information provided by benchmarking can help you identify –

  • Areas for improvement in your processes and operations
  • Competitive strengths and advantages you already possess
  • Focus areas where your company can strengthen and grow
  • Industry leadership or performance targets
  • Methods for achieving your company’s goals and objectives

For contractors, finding the right peer group to benchmark your company against is the first hurdle. For benchmarking to be useful, it’s important to choose the right group of companies to use as a benchmark.

The more comparable a peer group is, the more beneficial benchmarking is. As an example, the Construction Financial Management Association (CFMA) has a financial benchmarking toolkit. This toolkit allows users to benchmark against one or more specific peer groups based on –

  • Company size
  • Type of construction work
  • NAICS code
  • Best in class performance metrics
  • And more

Once you know your key performance metrics and have chosen a peer group to benchmark against, you are ready to evaluate your company’s performance and benchmark against the competition.

Whether you are just beginning to consider what a good peer group might be or would like assistance in analyzing your benchmarking data and developing a plan for improving your business, Berntson Porter can help! Contact your Berntson Porter representative at 425.454.7990.