An Industry Standard simply means what is normal for a particular industry. As small business owners it is often hard to know if we are on track with other similar businesses in our industry, and let’s face it most industry standards are based on companies who are publicly sold and therefore much larger than the typical small business. How can knowing the amount that Coors or IBM pays for cost of goods sold help you know if your craft brewing company or your computer shop is paying too much for supplies.
Doing a direct comparison is not always applicable; however using percentages such as gross margin percentages, can give us idea if your costs are comparable. By comparing the percentages between the big company and yours, we can often see where we may need to make changes, such as employee retention or even searching out new vendors. The problem is how to find those indicators and how to compare them to your results. Most small business development centers can help you find the information; there are also templates that you can use with Microsoft Excel to do the analysis. Or, you can call Alpha Omega Accounting and we will do this for you.
Our newest service will allow you to quickly see these Key Indicators for your industry in one easy to understand report. If you would like to see a sample report or would like us to create one specific to your business, give us call or drop us an e-mail. We will help you find the right information and show you how to apply it to your business so you can stay on track with the industry big guys and grow your business!