Today's small business owner is confronted with new business problems and opportunities on a regular basis. Running a company requires the ability to look outside the business for solutions, ideas, and best practices. However, borrowing ideas and best practices can be wrought with danger. Learn what big business already knows about benchmarking best practices and how to effectively borrow or steal ideas, tactics, and strategies.
What is a Best Practice?
A best practice is the process of finding and using ideas and strategies from outside your company and industry to improve performance in any given area.
Big business has used best practice benchmarking over decades and realized billions in savings and revenues in all areas of business operations and sales. Small business can reap even greater rewards from best practices.
Benefits of Best Practices for Small Business
- Reduce Costs: Small companies often do not have the deep financial pockets of big business to "re-invent the wheel". By learning what other companies have successfully done, a small business can save money without testing new ideas.
- Avoid Mistakes: Solving business problems on your own can result in costly errors. Learning what others have done can keep your business in business.
- Find New Ideas: Adopting the "Not-Invented-Here" attitude can spell disaster for small business. Learn to borrow the best from beyond your company.
Improve Performance: When your business looks for best practices outside your business, a wonderful thing happens. You raise the bar of performance and set new standards of excellence to propel your company forward.
How to Bake a Best Practice Cake?
The methodology for best practice study is critical. This is where most small businesses fail. It is like baking a cake. You need the exact ingredients and recipe to create the same result. This also applies to business.
For example, you learn of another retailer running in-store seminars to drive traffic and sales. Instead of rushing out to try the new idea, you'll need the recipe. What results did the retailer achieve? And how did they achieve it?
After careful, probing you discover the in-store seminars have increased traffic and sales by 6% and 12%, respectively. Also, you find the key ingredient is to make attendance confirmation calls to all the seminar attendees the day before or else attendance drops to zero. After finding all the steps to success than you are ready to effectively implement the idea in your company.
Steps for Best Practices
- Identify one business process or service to improve. (Product delivery)
- Look for one metric to measure. (Late Shipment %)
- Find competitors and companies within your industry and outside your industry. (FedEx)
- Collect information on the successful, best practices of other companies. (FedEx spoke and hub system)
- Modify the best practice for your situation. (Have one retail store per city act as central hub for shipments.)
- Implement the process then measure the results.
Remember to survey companies of all sizes. And the time to complete a best practice study doesn't have to take months. A few weeks of literature research and telephone interviews are often enough for small business.
Borrowing best practices from other businesses and industries can dramatically improve your small business. Take the time to learn the ingredients of success and your business will excel in good times and bad.