Industry Benchmarking
Find out how you’re really going. Against businesses like yours.
“We’re doing alright” is a feeling, not a measurement.
Most owners have no external reference point at all. You know your revenue is up on last year, and that’s the entire comparison available to you. Whether your gross margin is three points behind everyone else in your trade is completely invisible.
An illustrative position against a comparable industry band. No business or benchmark data is represented.
What gets compared
The numbers that actually separate them
Compared against businesses in the same ANZSIC classification and a similar size band.
- Gross profit margin
And how it moves with job size or client type, rather than as a single annual figure.
- Salaries, wages and on-costs as a percentage of sales
Usually the most revealing single number, and where a lot of businesses discover they have bought themselves a job.
- Net profit before tax
After the wages line has been normalised, so it means the same thing as everyone else’s.
- Work in progress and debtor days
And what your working capital is actually costing you to carry.
Illustrative positions only. Compare like-for-like businesses and investigate what explains each gap.
Where the data comes from
What the comparison can and can’t say
- De-identified aggregate data
By industry classification and turnover band. No individual business is identifiable in either direction — yours isn’t visible to anyone else, and theirs isn’t visible to you.
- Like for like on size
A $3 million builder against other $3 million builders, not against the industry as a whole.
- The sample size, stated
A benchmark drawn from eleven businesses is worth knowing about and worth treating carefully, and you should be told which one you’re looking at.
- Where the comparison isn’t clean
Industry classifications are broad, and two businesses inside the same ANZSIC code can operate very differently.
That doesn’t make the benchmark useless. It means the number is a starting point for a conversation rather than a verdict.
Before anything is compared
Getting your own numbers comparable first
Owner’s remuneration is often the culprit. If you pay yourself a small wage and take the rest as dividends or distributions, your wages line and your net profit line both look nothing like a business that pays a market salary. Comparing them raw produces a flattering, useless answer.
Unglamorous, and the whole difference
So we normalise before we compare — adjusting for owner’s remuneration, one-off items, and anything classified unusually. It’s the difference between a benchmark that means something and a table of numbers.
The deliverable
The number on its own doesn’t help
Finding out your wages ratio is six points above the benchmark is interesting. It isn’t actionable until someone works out why.
So the deliverable isn’t a table of variances. It’s a short read on which gaps are genuine, which are artefacts of how things are classified, and which two or three are worth doing something about.
What it usually turns up
Three patterns account for most of what owners learn
None of those are visible from inside. All of them change what you’d work on next.
The number you were worried about is fine
And a different one isn’t. Owners are often anxious about salaries and wages and relaxed about overheads, and the data says the opposite.
The business is fine and your own pay is not
Average on every operational measure, and the reason it feels hard is that the owner is being paid below market for the hours they put in.
A real gap, but a structural one
A business carrying costs its competitors don’t, for a reason that was a deliberate choice once and has never been revisited.
How often
Once for a baseline. Then annually, at most.
Doing it more often rarely tells you anything new, because the benchmarks themselves move slowly and your own numbers need time to shift. Owners who want a monthly view aren’t really after benchmarking — they’re after management reporting, which is a different service.
Sounding Board SolutionsIf you’d rather track these numbers monthly than once.
Why we suggest it first
Usually the cheapest useful thing we do
Either it confirms the business is performing and you can stop worrying, or it names a specific gap and you now know what to work on. Both outcomes are worth having. Neither requires an ongoing engagement.
Business Planning & ImprovementWhere a benchmark gap usually turns into a piece of work.
A word on averages
The average business in most industries is not one you’d want to own
So being ahead of the average isn’t the same as being great, and being behind it isn’t automatically a failure. Some of the best businesses we see sit deliberately off the benchmark in one direction, because of a choice they made on purpose.
Start with a consultation
Tell us your industry and rough turnover.
We’ll tell you what comparison is available and what it costs.
Book a consultation