What is benchmarking?
Definition of benchmarking
Benchmarking is the practice of comparing key data from your business against the same data from other similar businesses.
You might compare your business against others in the same local area or the same line of trade.
You might also compare your business to other individual businesses or to a local or industry average (sometimes referred to as the "industry norm").
Typical metrics for benchmarking might be:
- Sales - has your business sold as much as another in the same area?
- Gross or net margin - does your business keep as much of its profits as others in the same trade?