Canadian Small Business Benchmarking

Canadian small business benchmarking can be very useful for any small business located in Canada. It can allow you to compare your revenue, cost structure or profitability to your competitors to determine areas you may be able to improve.

 

A great figure to look at is net income as a % of sales. By looking at net income as a % of sales you can determine if you are operating as effectively as your competition. For example lets take a women's clothing store called Waterloo ABC Women's Clothing. They have a 3% net income as a % of sales.

 

By looking at a financial benchmarking report for all women's clothing stores in Ontario I know that the total industry only makes 2.4% net income as a % of sales. So for Waterloo ABC Women's Clothing they are more profitable then the industry average. But if we look a little deeper we can find more information that may be able to lead to better financial results.

 

By looking at the top quartile of the women's clothing stores in Ontario we see that the net income as a % of sales is actually 3.9%. This would lead you to believe that Waterloo ABC Women's Clothing should be able to improve its profitability above 3%. By looking at the expense lines as a % of sales for the top quartile of the women's clothing stores in Ontario, Waterloo ABC Women's Clothing may be able to find places they are over spending and then investigate to understand if the higher spending is justified. Women's clothing stores in Ontario spend an average 1.5% of sales on utilities. Now lets say for example that Waterloo ABC Women's Clothing spends 10% of sales on utilities. This would be a clear indication that Waterloo ABC Women's Clothing spends far too much on utilities and can most likely save money by shopping around for alternative utility suppliers. On the flip side a benchmarking report may also indicate that a company is not spending enough money on a particular area. For example, the top quartile of women's clothing stores in Ontario spend 16.9% of revenue on labour and commissions. If Waterloo ABC Women's Clothing only spends 5.0% of sales on labour and commissions they may be able to increase their profit by hiring additional floor staff or increasing their commission program.

 

With a financial benchmarking report there are countless ways the data can be analyzed that may lead to profit finding opportunities. By having the right information you have a powerful tool to improve the performance of your business.

 

Interested in getting a financial benchmarking report for your business? Go to http://www.profitworks.ca/financial-ratio-benchmarking-report-for-small-businesses

 

Thank-you for reading this article on Canadian Small Business Benchmarking.

 

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Profitworks Small Business Services Inc. a company that provides search engine optimzation and website conversion optimization services which increase the amount of sales generated from a website. Profitworks is a company built on the values of integrity, hard work, doing things better than they have ever been done before and the utmost commitment to our customers. The focus of our all of our services is to provide a positive return on investment to our customers.

 

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