How To Set & Scale Benchmarks For Your Business

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Growth is significantly more difficult if an entrepreneur doesn’t know what they are growing toward.

Intelligent businesspeople know that there are certain goals for growth that they should shoot for, and they set up their business practices to reflect these goals.

To understand if their business is growing fast enough and the right way, an entrepreneur will want to set certain benchmarks for growth.

These benchmarks help to guide the entrepreneur along their path.

What Are Benchmarks?

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To set benchmarks, it’s necessary to understand what benchmarks are.

Put simply, benchmarks are standards that people set to evaluate their success.

So, for business, there are benchmarks for growth that an entrepreneur can set to determine whether or not they are doing what they need to do to reach their goals.

Goals for growth shouldn’t be vague, though. They should be based on metrics that can be calculated and compared.

Understanding Metrics

Metrics are essentially the numerical value of different aspects of a business.

For example, metrics may include:

  • Sales Revenue
  • Net Profit

  • Social Media Follower Growth 
  • Customer Retention
  • Number of Leads

  • Website Visitors
  • Time Spent On Website

These metrics and more will help you to understand how well your business is doing and whether or not you are hitting the benchmarks you have set for yourself (we’ll get into setting benchmarks in a moment).

(Note: Want help determining where to go with your business? Check out our 100% free course with Daymond John, Daymond John: 7-Figure Masterplan, to get some direction from one of the best. You can find it here.)

Guiding Metrics

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There are a lot of different metrics that need to be considered, but some metrics are more important than others.

Which metrics are most important really depend on the company and the goals of the company.

This is where the concept of a North Star Metric comes from.

The term “North Star Metric” was coined by Sean Ellis of GrowthHackers and essentially refers to the metric that a business follows the closest to guide their progress and growth.

When setting benchmarks, it’s good to have a North Star Metric and some supplementary guiding metrics to steer your growth and keep you on your set course.

Now that you understand more about what metrics are and how they relate to benchmarks, let’s look at how you can set your benchmarks for success.

Setting Benchmarks

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Now that you understand what benchmarks are and why you should set them, let’s get into how.

Competitive Analysis

One of the first things any entrepreneur should do when starting their business is take a look at their competitors. This is called a “competitor analysis.”

During this analysis, a business owner will want to consider the branding, target audience and metrics of their competitors.

This is going to take some digging and a little bit of work.

Once a businessperson has a better idea of what their competition looks like and what their metrics look like, they can start building their own benchmarks to meet or exceed their competition.

A very simple example of this is taking a look at the revenue of different businesses in your industry. If you are in fashion retail, you’ll want to take a look at how much your competitors in that niche are making.

Keep in mind the size of your business during your competitor analysis. If you own an eCommerce business, setting your benchmarks at the same level as Amazon is an unrealistic goal.

Instead, find your direct competitors and compare yourself to them.

On top of the size of your business, you’ll also want to consider your brand.

Understanding your brand will help you to better understand what your guiding metrics should be.

From there, you can start setting your benchmarks for those metrics.

Analyze Your Success or Failure

One of the main reasons for setting benchmarks is to analyze your success or failure.

By taking a look at the benchmarks that you have created, then comparing them to your competitors, you can get a better idea of how you are stacking up.

By paying attention to certain benchmarks and metrics, you can also tell what direction your business is going…and whether or not you will want to stay the course or pivot.

Should I Pivot?

“Pivoting” has become a very popular term as of late, and many businesses have begun pivoting to change the direction their business is going in.

What Is Pivoting?

“Pivoting” is a term coined by Eric Ries, and it essentially refers to correcting course.

The example that Eric Ries will often give when he is discussing pivoting is GPS in your car. Your GPS will sometimes need to reroute to keep you on the right path—and this course correction could mean the difference between arriving safely and driving into a lake.

It’s important to understand that the course a business sets to hit certain benchmarks doesn’t have to be set in stone. If there's an issue hitting certain benchmarks, it may be time to consider pivoting.

Should I Pivot Or Stay the Course?

Here’s the issue…because pivoting has become such a popular term, people feel the need to incorporate this concept into their path to hitting their benchmarks.

The thing is, not everyone benefits from pivoting.

Think about it this way—what would happen if you pivoted in life every time you ran into a problem? You probably wouldn’t get anywhere.

There are times when things truly aren’t working out, and the only way to be successful is to change course. There are other times when there are obstacles, but those obstacles can be overcome.

Let’s take a look at that car example again.

If you are driving and hit a construction site, you’ll likely need to pivot. If you simply hit a bumpy road, there is no need to completely change course.

This is why you’ll want to take a closer look at your metrics and your benchmarks before you decide to pivot—even if it’s only one aspect of your business.

What Are The Benchmarks For Your Business?

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If you don’t already have a competitor analysis, it’s time to get started with one. This will help you to choose which metrics are important to your business and what benchmarks you should shoot for to reach your goals.

If you start heading down the path to your benchmarks and realize there are major obstacles you can’t overcome, pivot!

Once you hit your benchmarks and they become too low, set new ones and continue to grow your business.

(Note: Want help determining where to go with your business? Check out our 100% free course with Daymond John, Daymond John: 7-Figure Masterplan, to get some direction from one of the best. You can find it here.)