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Best practice in business means finding - and using - the best ways of working to achieve your business goals. It involves keeping up to date with the ways that successful businesses operate, and measuring your ways of working against those used by the market leaders across your and other sectors.

This measuring is known as 'benchmarking'. It allows you to compare your business with other successful businesses and highlight areas where your business could improve. See how to benchmark your business performance.

Benefits of best practice for businesses

By following best practices and benchmarking against other businesses, you can:

• become more competitive
• increase sales and develop new markets
• reduce costs and become more efficient
• improve the skills of your workforce
• use technology more effectively
• reduce waste and improve quality
• respond more quickly to innovations in your sector

Standards for best business practice

Standards are fixed specifications or benchmarks, which are established by independent bodies such as the . BSI develops two main types of standards:

• technical standards - precise specifications against which you can measure the quality of your product, service or processes
• management standards - models for achieving best business and organisational practice

Conforming to the right standards will enable you to apply best practice across your business. It will allow you to work against objective criteria to achieve manufacturing or service quality. See how to make best use of standards.

Management is a key area of business. Management best practice can help ensure management is effective in driving business success.

Examples of management best practice

Management best practice involves:

• communicating a clear mission and strategy
• leadership by example
• setting realistic and achievable targets
• an open and communicative management style
• clear and careful strategic planning

Tools to help achieve management best practice

You can use several business tools to achieve management best practice, including:

• benchmarking
• forecasting
• financial planning
• strategic planning
• performance monitoring

See more on strategic planning for business growth.

Communicating your objectives and strategies to staff is an essential part of management best practice. A good communications policy will ensure that everyone knows where the business is heading, and understands their role in its development.

Measure business performance

Using key performance indicators (KPIs) is an effective way of monitoring your business. You can use KPIs to measure progress in achieving business objectives across a range of activities and identify areas that need attention. You can also use them to measure activities such as sales volumes, profitability, quality and staff turnover.

Tools such as benchmarking, business planning and performance monitoring will help you to measure your performance and compare it with that of your peers and competitors and against your own objectives.

Where necessary, you can introduce new ways of working to improve competitiveness and business efficiency. Having accurate and up-to-date information about your business performance will also help you with any future planning.

Change management best practice

You can apply management practices in change initiatives as well. These can help provide structure and control to planning and implementing change in a business. Learn more about best practices in change management.

Successful businesses are often those that attract, develop, motivate and retain the best people. Following HR and people management best practice can help you get the most benefit from your staff.

Examples of HR best practice

Key business strategies for embedding HR best practices in business include:

• involving employees in the development of the business
• communicating with employees
• adopting flexible working and policies that encourage equality and diversity
• setting targets and rewarding achievement
• offering employee development and training

See also what is best practice in business.

Use staff input to improve business practices

Employees can drive improvements across your business. They are often best placed to see what improvements to working methods you can make and where, or the first to notice market demands changing. For example, production staff will be aware of inefficient production processes, while customer service staff will know exactly what your customers think about your product or service and what they commonly complain about.

You can use this knowledge to involve employees in developing improved ways of working. This is likely to make your staff feel valued, as well as help you gain their trust, commitment and buy-in when implementing changes. Poor communication, on the other hand, can result in misunderstandings and mistrust from your staff. 

Read more about the advantages of good employee communication.

Improve people management

Good people management should extend across all areas of your business. Recruitment, training and people development, working practices and the working environment are all areas which you should continually review to see where you can make improvements.

People management systems such as performance appraisals, quality circles, cascade briefings, 360 degree feedback, and internal communications will help you to get the best from your employees. Learn more about managing staff performance.

Most businesses experience operational issues that can be resolved through the introduction of best practice. This includes, for example:

• quality management standards and systems
• stock control, delivery and supply chain management
• purchasing and ordering policies
• information management

You can identify which operational areas will benefit from best practice by:

• benchmarking
• internal analysis
• reviewing appropriate national and international standards

Quality management

If the quality of products, services or processes is a concern in your business, introducing quality management systems can help. Examples of such systems include:

• Total Quality Management
• ISO 9001 standards
• automated stock control
• just-in-time ordering and delivery
• lean manufacturing and supply

See how to use quality management standards in your business.

After you identify areas for improvement in your business, you can implement the necessary changes. It is important, however, to keep your employees, suppliers and customers aware of what you are doing, and to make sure that the changes do not cause unnecessary disruption to your business. It is advisable to follow, as much as possible, best practices for change management in business.

Sales and marketing strategies play an essential role in the success of your business by helping you reach more customers and sell more products or services. You should closely align your sales and marketing efforts to enable you to achieve best practice in your business, improve lead generation and drive your revenue.

Benefits of aligning sales and marketing

Businesses where sales and marketing efforts are closely coordinated typically achieve:

• higher customer retention rates
• higher sales win rates
• increased revenue growth
• faster growth
• faster profit growth

Sales and marketing alignment also shortens the sales cycle and links return on investment directly to marketing materials.

Key elements of sales and marketing business best practice

Technology has changed buying behaviour in recent times, so sales no longer have full autonomy over the buying process. Marketing has an increasing role to play, as it offers a critical link to understanding the buyer.

You should coordinate your sales and marketing to gather a clear picture of your target buyer and the different steps in their buying process. You should align sales and marketing in areas of:

• revenue process
• corporate messaging (eg for sales pitches)
• content strategy for marketing and sales
• lead follow up or handoff process
• service level agreements, if necessary
• regular communications

Best practices for unifying your sales and marketing teams are nowadays underpinned by the use of technology, specifically digital marketing. You should consider harnessing the power of the internet, social media, email and mobile technology to reach your audience.

Digital marketing

Digital marketing offers even the smallest business an affordable way to target customers. Tactics can include websites, social media, pay per click advertising, search engine optimisation and email marketing.

Some of the benefits of digital marketing include:

• cost-effectiveness - it is often much cheaper than traditional marketing
• measurable results - help to make improvements, as well as reveal the return on investment
• new markets - online channels can open your business to a global market
• personalisation - messages can be targeted and unique to individuals and groups of customers

As with all best practice, it is important to plan your digital marketing carefully. You must also comply with any legislation that applies to electronic business communications or online transactions.

Fostering a culture of innovation and creativity in your business can help you stay one step ahead of your competitors. It can ensure that your products and services remain up to date and in line with what your customers need. By following best practices, you will be able to react more quickly to changing markets, customer expectations and needs, and you are likely to see changes coming before others do.

Innovation best practice

Best practice in innovation involves constantly looking at your existing products, processes and procedures to see what improvements you can make. For example, you can choose to innovate through:

• continuous product or process improvement
• product design
• applying new technologies to existing or new products or service

Innovation may come in the form of small changes to existing products or services, or a completely new product, service or process. It can also come from internal sources (such as a product development team) or external sources (such as customer requests or technological advances). See more on continuous improvement for better profitability.

Despite common belief, innovation doesn't always happen spontaneously. Innovative businesses often have strong, inspirational leaders and management, and well-trained and motivated employees. These businesses constantly look at every aspect of the organisation - not just its products and services - and ask the question 'how can it be done better?' 

You should regularly and intentionally plan for innovation in your business.

Learn more about the common approaches to innovation and find seven ways to encourage innovation in your business.

You can give your business a distinct competitive advantage by making good use of information systems and technology.

Importance of technology in business

Technology has transformed the way businesses communicate and interact with customers and suppliers, market themselves, access information, and buy and sell products. 

Things like video conferencing, webinars and mobile devices enable different ways of deploying staff. Initiatives like hot-desking and remote working can increase productivity, improve communication and facilitate flexible working methods. Even in the smallest companies, integrated databases and systems can bring significant cost savings and improvements in efficiency.

You should carry out a technology needs assessment for your business and develop an IT strategy to ensure that you implement IT best practices.

IT security best practices

The safety of information systems - and cyber security - is critical to any modern business. If your operations depend on digital processes, data and systems, your business may be vulnerable to a whole range of cyber security risks.

Ensure that you follow IT best practices to protect your business online. These may include different safeguards for information access, such as:

• passwords
• firewalls
• security software

You should also ensure that all of your employees are fully trained in using passwords and other security measures, and that they are aware of your policies and procedures for data and equipment security. Read more about cyber security for business.