Join the club…how peer groups can grow your business

Since 2005, I have been fortunate to be involved with two excellent peer groups.  Both groups are made up of CPAs and accounting firms across the country who do what I do – provide accounting, payroll, and tax services to small businesses.  One group is focused on how to operate the business better and the other is focused on how to market the business to new clients.

The purpose of this blog entry is to emphasize how participating in the right peer group can have huge benefits for you and your business.  Without question, small businesses that find the right peer groups are more profitable and better managed than those who don’t.

Using myself as an example, I estimate that at least 40% of my business profit this year is directly related to ideas I got from my peers in these two groups.  That’s huge!  Below are some examples of how my business is better because of the peer groups:

  1. Production management – I have systems to monitor service quality and quantity.  And, I can compare my results to other firms.  This helps me to know where and how I need to improve.
  2. Sales & marketing – how to find the right kinds of clients without wasting a lot of time and money.  My peer group helped me develop a steady flow of new clients that fit our business model.  I can compare my sales & marketing results to other firms in my group so that I know if we’re being effective.
  3. Recruiting systems – how to hire the right people without wasting a lot of time and money.  My staff is twice as good as it would be without this knowledge and my staff turnover rate has been cut in half, at least.
  4. Financial results – I can compare my revenue, costs, and profits to several other firms that are very similar to mine.  This helps me know what I’m doing right, and what I need to improve.
  5. Constant flow of new ideas – My peer groups are constantly tweaking and improving their business models.  I try to visit a peer’s business two- to three times a year.  Talking to my peers frequently exposes me to the best new ideas in my industry.  These new ideas make our businesses more efficient and more profitable.

I think the most important quality of a good peer group is that its members are committed to sharing their best ideas with each other.  Participating in a group that isn’t willing teach and share their best ideas would be a waste of my time.  A great peer group is welcoming, sharing, smart, and hard-working.  They get to know each other’s businesses and help solve problems on a daily basis.

If you’ve not yet found the right peer group, keep looking…but find it as soon as possible.  If your competition has found a great group…today may be the day one of their peers shares that one gem of an idea that gives them the upper hand in your market.