Sometimes in my wild thought, I wondered how a business could get better if it didn’t know what being the best meant. How could a small independent company tell if they were indeed performing at or above the industry standard if there was no available data to say what was the best, average or poor?
Though there isn’t any real performance standard to gauge business financial performance, for any small business. But for the publically traded organizations, there are publicized information to indicate performance; this is so because not too many folks publically discuss their small business performance. There are however some options you could pursue; the IRS posts some information that should give you some basic knowledge about your industry.
But the best way to really compare your small business start-up with similar sized operations is with a FOCUS GROUP. Are you wondering what that stands for? Or what is the meaning of the word focus group? And how does it provide the information? Or rather How can it help your business need?
A focus group is nothing more than a gaggle of business owners involved in a similar kind of business with a similar demographic customer base and the same volume of sales. The idea is, if you had a small business processing or selling close to $1 million per annum in sales, and was involved in retail sales to the medical community, and the product line was something like dental instruments, then you would want to get together with similar business performing similar operations.
I know you don’t want to get into any form of direct competition, usually, members in similar markets as yours are connected from around the country. Let’s say you have your business in New-Brunswick, it is typical to say you would want to have folks from the South, west, and the Midwest that operates a similar business to be in your group. In practical, the facilitator of the group first gets members to agree to get together quarterly to discuss business operations and financial performance. The members submit their report to a central data collection point and the information is processed. Financial performance is evaluated and tiered.
Whenever the group get together, members that are performing well above the ladder in certain areas are asked to educate the other group member how and why they can perform at that level. They reveal their secrets. The other members learn and integrate these secrets and all of sudden the group begins to develop into a pretty cohesive and similar performance operation.
In just a matter of years, the group gets madly competitive with each other and it gets to be so much fun to see how some of the group members rise to the number one position in the ranking. Most groups have about 25 members, some will mature out of the group and the group allows new members in to keep it going. Twenty-five members are typical due to the cost of compiling data submitted by each group member and the logistics involved in getting together.
Routinely different member hosts the group. Group member evaluates the host for employee qualifications, facilities, customer relations, etc. This gives the host the rare advantage of having someone educate him on what he is doing right and where he is going wrong and how best he could do the necessary shifting for better result.
It acts as a feedback loop enabling the host to make quick improvements over a couple of years before he/she may re-host the event again. In real life buzz, the focus Group concept has been so beneficial to many small business owners in climbing to the top of their industries with much ease. It is my uttermost believed that as it has worked well for others, it should do the same for you. Knowledge is Power! Take advantage of it.