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Watching Competitors’ Spending To Set Your Company’s Financial Plan
A recent article on Fast Company’s web site about analyzing the spending of those around you to help determine how much you should spend made us think about assessing spending for projects and personnel on a larger scale. It’s always tough to determine whether or not you’re paying what you should – looking around at what your competitor’s spend is a good way to set your standard.
As areas of the industry fluctuate in importance it becomes necessary to shift the allocation of funds around to best meet your company’s needs and stay competitive in your field. As a financial professional, determining when and where to make these changes can be difficult. This is where you can look to industry leaders to get a sense of where your company needs to be.
Choose the companies you base your spending on carefully – you don’t want to emulate someone too far ahead of the curve. Find a company that is showing signs of success in the areas you feel are important. Being able to point to current ROI for your competitors will go a long way when bringing your ideas to superiors and decision makers.
For a more conservative approach, temper the spending trends of the more innovative companies, which may lose a lot of their early investments in ideas that don’t pan out, with the more tried-and-true practices of companies that are more in line with your current business model.
Whichever method you use to determine spending, it is imperative to stay informed on how your competitors are allocating their funds. Many times, you can predict their next move long before they make it based on where their money is heading.