You think you're better...but you're not

Have you ever noticed that you are constantly comparing yourself with others?

And yes, I blame Facebook for most of this!

Was your vacation cool enough, is your car new enough, are you as fit and trim as you should be, etc.?

Many times you compare yourself to others, who are in worse shape, to justify your situation.

For example:

• An out of shape person may feel better about themselves after watching The Biggest Loser.
• A financially strapped person may feel better about their finances, after listening to the first few callers on the Dave Ramsey Show discuss bankruptcies and foreclosures.
• An overwhelmed parent may feel better about themselves after doing some service work in a shelter.

However, you may still be overweight, broke, and in disarray.

So should you bother comparing yourself at all?

If you are a business owner, the answer is YES!

Why?

 “What gets measured gets done!”

Unfortunately, there are many business owners still justifying their situations.

• A restaurant owner may feel good about their business, because they have great Yelp reviews, but they could still have a net loss for the year.
• A landscaper may feel good about their Accounts Receivable being an average of 60 days, because they know a consultant with an average of 90 days.
• A hotel owner may feel good about their debt-to-equity ratio being low, because it was even lower last year.

However, the restaurant is still losing money, the landscaper still has some collecting to do, and the hotel owner is still upside down on the business.

So how should you compare your business?

The best way to measure your business is against your competition.   This way you get an apples-to-apples comparison, instead of an apples-to-oranges comparison.

Common measurements are your costs-of-goods-sold (COGS), net profit margin, current ratio, payroll expenses, advertising expenses, etc.

In fact, the TSBDC has a “comparison” tool that compares your type of business vs. others in Tennessee and nationwide.

Comparing against other businesses in your industry is a more accurate way to determine how well you are doing and what you could improve upon.

And remember, nobody posts the bad stuff on Facebook, so stop comparing yourself there too!

p.s.
Email me at charles.alexander@volstate.edu to learn more about the "comparision" tool.