In business, it’s easy to survive in the middle of the pack with just average effort. Many companies aim to meet “industry averages” in growth, profitability, and other key metrics. But this approach misses a crucial point.
Averages encompass the performance of all companies in an industry, including those that are failing or struggling. They reflect a midpoint, not a benchmark of excellence. When you aim for average, you’re inadvertently comparing yourself to businesses that might be barely getting by, worrying about next week’s payroll.
Consider this: averages are a mathematical tool that often obscure the real picture. They don’t highlight top performers or provide the full range of outcomes. For instance, if the average net profit for general contractors is stated as 2.3%, it doesn’t reveal the spread from those losing 23% to those making a 31% profit.
If you’re a general contractor hitting a 3% net profit and feeling satisfied, remember that you might be 28% below the top performers. Are you comfortable leaving that kind of money on the table?
Aiming for average can be disastrous for your business. It’s time to set your sights higher, understand the full spectrum of performance in your industry, and strive for excellence.
Don’t settle for average—aim to outperform.