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Building Your Service Business with Benchmarking

This post includes excerpts from my Jan-Feb 2012 Snow Business column.

benchmark your business

Collect data on every aspect of your business so you can benchmark it and track progress.

Spring services have been underway now for months, so I thought it might be a good time to remind you that you should be benchmarking your ‘big three’ right now: sales, production and overhead efficiencies.

Why now? Because you’re likely over the hump of getting services started up and day-to-day production is in full swing. It’s literally the perfect time of year to check your vitals and see how things are playing out.

What Should You Benchmark?

High-level benchmarking can begin with a study of your top performers. Who is your top salesman, crew leader and foreman? Take any one of these roles and document everything quantifiable that this person does in a day/week/month. This will help you prioritize your benchmarking efforts.

Examples of what you can benchmark:

  • How many miles a truck in your fleet runs in an average month or year
  • What type of plow is most effective for crews
  • What type of mower is most effective for crews
  • How long it takes someone to edge 100 ft.
  • How many dollars a plow truck generates during a plowing event

You might have to tag along with someone in each role for a day or two, stopwatch in hand, but the time you spend collecting data is worth it. Plus, if you promote an ongoing effort to monitor something, you and your organization will eventually be able to focus on the priorities of the business, which is the underlying motivation for benchmarking in the first place.

Developing Standards

Having your best performers set the tone for maximum capacity and high-end results is great to know. I am of the mindset to take the collective average of everyone/everything you are measuring and add 10%. This is a good overall standard for company accountability.

For example, if you have three salespeople who each, on average, call 60 people a week, your performance benchmark is 66 sales calls per week. Because you measured this aspect of the business, you know that anything less than 66 calls per week will amount to inferior sales performance.

After a while, you will begin to understand the big three and you will need to add subcategories for stronger analysis. The easiest way to come up with these subcategories is to look at the results from your data collection for the big three. Identify issues or challenges the business struggles with and break down areas that you can delve into further. Get as specific as you can.

What to do With Your Results

Throughout this process of monitoring, measuring and eventually benchmarking, you need to make the data accessible to your team. Making these results readily available is really what this process is all about.

You should keep a running chart, spreadsheet or report on your benchmarking efforts and analyze this as often as possible. I used to break my old business down by quarter, trimester, month, day … any way possible so that I could learn how to identify and more quickly cope with an area in the business that was struggling.

Once you have the results, use them in a positive, friendly, competitive manner with your teammates. I have come to find that the best reward you can give someone at your company at all levels is to measure them. It is always exciting to know who is in first and who is in last, and any true competitor wants to know where they stack up against the competition. This is how benchmarking creates a system of reward.

When to Begin Benchmarking

The best time to begin benchmarking key company processes was yesterday. The second best time is today! Grab a piece of paper and write down one process in your company you can benchmark. Try to keep it simple and limited to one page. Taking this one action now will get the ball rolling. The sooner you begin, the sooner you will start reaping the business rewards of benchmarking.

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