Benchmarking the Performance of Business … the Performance of Business Development Services ......

By Elaine Edgcomb and Tamra Thetford September 2012

Benchmarking the Performance

of Business Development Services

©The Aspen Institute/FIELD. All rights reserved. 1

Benchmarking the Performance

of Business Development Services

By Elaine Edgcomb and Tamra Thetford

September 2012

FIELD

The Aspen Institute One Dupont Circle, NW, Suite 700

Washington, DC 20036 www.fieldus.org

Funded in part through a grant award with the U.S. Small Business Administration. All opinions, conclusions, or recommendations expressed are those of the authors and do not

necessarily reflect the views of the SBA.

Additional support is provided by the C.S. Mott Foundation.

©The Aspen Institute/FIELD. All rights reserved.

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How do your business development services compare to others in the microenterprise field?

� Are you reaching disadvantaged markets in line with your peers working in similar markets?

� Are you on par in terms of the number of individuals assisted? � Is your program effective in enabling clients to achieve mastery of key business content? � Are you more or less efficient than other business development service providers? � How does your cost recovery compare?

MicroTracker provides data that can enable your organization to address these questions, comparing your business development services activities to those of the industry as a whole, as well as to key peer groups or organizations. Specifically, microTracker enables you to benchmark your organization to other business development services providers using the following key indicators: Target Markets:

� Percent women served � Percent minorities served � Percent of low-to-moderate income individuals served (at or below 80% of the HUD

Median) � Percent of low-income served (at or below 150% of the HHS Poverty Standard) � Percent pre-business at intake � Percent in business at intake

Scale of Business Development Services:

� Number of individuals receiving training and technical assistance � Types of business development services offered � Average hours of training/technical assistance provided to assisted individuals

Effectiveness of Business Development Services:

� Training completion rate � Business plan completion rate

Efficiency:

� Cost per individual assisted � Cost per client

Clients are a subset of all individuals served, and represent those who receive substantial services from a program and on whom programs expect to observe outcomes as a result of their program participation. Cost Recovery:

� Percent of business development services expenses covered by earned revenues


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This guide illustrates a step-by-step process that organizations engaged in business development services can use to generate benchmarking data related to these services on the microTracker site and through consulting services with microTracker staff. Step 1: What do you want to know? As described in the introduction to this guide, there are several key questions a manager may have about the performance and efficacy of a business development services program. Which questions are most important to you? Being clear on the questions you have about your own program ensures you select the right indicators and later choose the right points for comparison. Pull together your key questions and determine which measures help you answer these questions.

Meet JEDI:

Jefferson Enterprise Development Institute — JEDI — is a mature business development services organization in northern California. Its mission is to increase the economic well-being of people and communities through business development and local wealth creation. JEDI provides microenterprise development, small business and asset development services in the northern-most rural and frontier counties of California. JEDI came to microTracker with a number of benchmarking questions, the first set of which concerned how JEDI compared to its peers in terms of key performance measures related to its targeting, scale, effectiveness, and efficiency. The organization was also interested in benchmarking its outcomes against other peer organizations as well as in comparing the outcomes of clients who had participated in different program services. Its intent was to use all this information for three purposes: internal strategic planning, advocacy and fundraising, and improved marketing and communication to prospective clients about their likely outcomes.

Who do we serve?

Women Minorities Low-income Business

Status

How does the scale of our

training program compare?

# of individuals

assisted Avg TA hours

How effective are our services? How much do they cost?

Training completion

rate

Business plan completion

rate

Cost per individual

served


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Step 2: What comparisons do you want to make?

� 17 � $1,300

Numbers by themselves are of limited use. Comparing them to something helps put those numbers in context. If you know you assisted 17 entrepreneurs and the median for the industry is 300 you might feel you have work to do. If your cost per client figure is $1,300 and for other small, young, training-led programs it’s $2,600, you are likely to feel like you are cost effective. Do you just want to know how you compare to the overall microenterprise industry or are you particularly interested in how you look when compared to other young organizations or those with two or fewer full-time staff? Perhaps you are determined to be the best at something and you want to focus on top performance for a specific measure. Step 3: Organize the data You can set up a simple table that lists your selected measures and has a column for your program’s data as well as columns for the peer comparisons you have selected.

As a mature (14 year old), rural, training-led program, JEDI was interested in understanding better how it compared to those that were like it with respect to these characteristics. As a long-term MicroTest member, JEDI had collected a substantial amount of performance and outcomes data over the years, and intended to mine it to answer its questions. Overall, it was interested in determining if it could demonstrate the effectiveness and cost-efficiency of its work to local policymakers and funders, and it wanted to first be able to provide them a context for understanding how JEDI looked in relationship to the field as a whole. Was it as deeply-targeted, scaled and efficient as others? Could it demonstrate that its clients achieved immediate knowledge gains that could translate into longer-term business outcomes?

Common Comparisons

� All programs reporting: gives you the

broadest look at the field with data for all programs reporting on that measure.

� Program focus: distinguishes between an organization’s main line of business -- lending or training.

� Top performing: gives you the threshold

value required to be among the top

performing 20 percent of programs

reporting on a specific measure. � You can also cut the data by Geography,

Budget, Staff Size, Volume etc.


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Measure JEDI 2010 Rural Programs(national median)

Mature Programs

(national median) # of Clients Served 165 # of Individuals Served 380 % Women Served 74% Low Income - 150% of HHS 54% Low Income - 80% HUD 73%

Average TA hours per individual 7 hours

Training Completion Rate 82% Formal Business Plan Completion Rate 100% Cost per Client $3,014 Cost per Individual $1,346 Step 4: Mine the data It is easier to take the data in sections — start by pulling together the data on scale and targeting to see how you might compare to the peer groups you’ve selected. In microTracker, click on “Analyze” in the microTracker navigation bar. Select the “Size and Diversity” category to explore the targeting and scale measures.


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Once you’ve chosen your content area, you’ll have three choices to review the data — the Raw Data tables of MicroTest data, some Quick Reports summarizing MicroTest data graphically, or a Report Builder tool to pick and choose U.S. Microenterprise Census measures that you’re most interested in.

What’s the difference between MicroTest and the

U.S. Microenterprise Census?

� MicroTest is a long-running data collection project that captures both performance and outcome measures submitted by microenterprise organizations across the country. MicroTest datasets are smaller, but contain a more robust set of performance measures. The “Quick Reports” and “Raw Data” available on microTracker present MicroTest data.

� U.S. Microenterprise Census has been conducted periodically since 1992. The census, as its name implies, attempts to capture data from a large segment of the industry. Historically, it has collected data on a more limited set of measures. This dataset fuels the “Report Builder” function on microTracker and allows for benchmarking with a wider group of organizations nationwide.

� microTracker brings together MicroTest (deep data) and the U.S. Microenterprise Census (broad data) in one spot. MicroTest data is now being collected through the U.S. Microenterprise Census so that deep data becomes available on more of the industry.


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Click on “Report Builder” so you can select the indicators relevant to your specific questions and filter the results in custom ways. The data from Report Builder is pulling from data submitted through the U.S. Microenterprise Census.

Follow each of the guided steps to build your report. You can choose from recent years of data and then select your indicators…

Next you can choose specific individual programs (those available via microTracker) to bring into your report. You likely will want to see how your own program’s results compares to industry results, and, if you’ve identified other organizations to benchmark against, you can add those as well.


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And, finally, you can further refine your data search to meet your needs. If you were a rural program, you could filter the data to see the results of programs that indicate they operate in rural areas. Once that data is generated and the rural column on your data table is completed, you could come back and select “any area”, and then select mature programs to pull the data for a second peer comparison group. If you wanted to generate data for programs that were both rural and mature, you could select both options simultaneously.

There are many other ways you can refine the data to generate comparisons to programs similar to your own (i.e. budget size, staff size, percent of women served, etc.).

Tip! Start by choosing one or two indicators to see how sizable the pool is that you are trying to evaluate. The results display in graphic form. In blue you’ll see the individual program selected — JEDI —and in red you’ll see national median data for rural programs.


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You can also click “View Data Table” and see the full results for your selected measures in table format.

If you hover over the individual bars, you can see the number of organizations reporting for each measure, and the median for the group. In this example, the median number of individuals served for rural programs is 160 with 142 programs reporting. Let’s go one step further. If you click on the link for Source Values, you will be taken to the list of those 142 organizations and you can see the data reported by the individual microenterprise development organizations.

Tip! This is also an excellent way of finding individual organizations against which to benchmark your organization.


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After going through these steps the following data can be filled in on the chart.

Measure JEDI 2010 Rural Programs (national median)

Mature Programs

(national median)

# of Clients Served 165

# of Individuals Served 380 160, N=142

300 N=171

% Women served 74% 52%

N=123 56%

N=153

Low Income - 150% of HHS 54% 52% N=80

45% N=106

Low Income - 80% HUD 73% 57% N=4

56% N=102

But there is one indicator that was not provided in the Report Builder (number of clients served). As mentioned earlier, some of microTracker’s data comes from MicroTest, and, therefore, is available on a smaller group of reporting programs. Find this type of data in the Quick Reports and Raw Data tables.

The “Quick Reports” section contains the data needed to fill out the missing client comparison information for rural programs.


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In order to fill in the data for the cost measures, you need to visit the “Cost and Sustainability of Micro” categories on the “Analyze” page. The “Raw Data” section contains the data needed to complete the missing costs comparisons.


Mature Programs

(national median) # of Clients Served 165 26 292


300 N=171


N=123 56%

N=153


45% N=106

Low Income - 80% HUD

73% 57% N=4

56% N=102

Average TA hours per individual

7 hours 7 hours

N= 3 3 hours N= 20

Training Completion Rate 82% Formal Business Plan Completion Rate

100%

Cost per Client $3,014 Cost per Individual $1,346


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The table provides information on the MicroTest measures in this category for all reporting programs as well as peer groups such as organizations that have indicated they are primarily credit-led or training-led.

In order to find data on the training completion and business plan completion rates, you need to select the “Business Development Services Volume and Performance” category on the “Analyze” page. Data on “Quick Reports” provides both training and business plan completion stats for the entire MicroTest dataset as well as for lending-focused, training-focused and low-income focused peer groups. However, data is not currently available on microTracker for rural programs and mature programs. JEDI was able to fill in the missing data for these two peer groups by consulting with microTracker staff. MicroTracker staff offer these services to subscribers at the Premium Plus level.


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After going through the different categories of data available data on microTracker and from microTracker staff, your data table should now be complete. Now you have side-by-side comparisons with different peer groups to see where your organization might be excelling, where it is on par, or where there may be opportunities for improvement.


Mature Programs

(national median) # of Clients Served 165 26 292


300 N=171


N=123 56%

N=153


45% N=106

Low Income - 80% HUD

73% 57% N=4

56% N=102

Average TA hours per individual

7 hours 7 hours

N= 3 3 hours N= 20

Training Completion Rate 82% 82% 83% Cost per Client $3,014 $2,536 $3036

Cost per Individual $1,346 $1,167 N=99

$1,167 N=125


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Step 5: Understand the results and use the data

When JEDI looked at its results, it found that its targeting compared favorably to other programs like itself. The percent of women served, and low-to-moderate income individuals assisted placed it above the median of percent reported by its peers in all three categories: rural, training-led and mature. The percent of low-income served placed it above the median reported by its peers in that category as well, although its result did not exceed the median as much as it had in the other two categories. Overall, JEDI found that it was reaching the disadvantaged at levels that placed it above the median result for large numbers of programs across the country. It also found that the average amount of training and technical assistance that its clients received equaled or exceeded the median of hours reported by others. And, its training completion rate matched the median result. It should be noted that the comparison group for these measures was much smaller than the previous ones, but the comparison still signaled to JEDI that its performance was on the right track and certainly in line with other microenterprise programs that have reported these metrics to MicroTest in the past. JEDI compared its costs to its peers in two ways. It calculated the cost per individual assisted, and it also calculated the cost per client served. Clients are a subset of all individuals served, and represent those who receive substantial services from a program and on whom programs expect to observe outcomes as a result of their program participation. In both cases, JEDI’s costs were a little higher than the median costs reported by its peers, but not substantially so. It was able to compare its costs per individuals served with over 100 organizations. Staff reviewed this data internally, and, along with data compiled in benchmarking its outcomes (to be discussed in a subsequent tool), will use it in an upcoming board and staff retreat to highlight program accomplishments and what needs to be improved. Based on this, staff will develop goals for the coming year and a scorecard report to track them and compare them with current results. Staff also see the value of these findings in marketing and public relations, and have developed a fact sheet, “What a Difference JEDI Makes,” to demonstrate its value to stakeholders in its market. In all, the Executive Director of JEDI, Nancy Swift, commented that, “We were pleasantly surprised by some of the gems we discovered in this process and have some areas of interest to flow up on, too.”

FIELD The Aspen Institute

One Dupont Circle, NW, Suite 700 Washington, DC 20036

www.fieldus.org

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