Many small business owners are too busy running their businesses to worry much about what the rest of the world is doing. But measuring yourself against industry benchmarks is useful for a number of reasons. Measuring your business against companies of comparable size can help you pinpoint areas in which you exceed or areas in which you can improve. They can also help companies establish a baseline—in other words, a starting point from which you can measure future growth, market share, quality and a myriad of other indicators.
The National Association of Manufacturers polls small and mid-size manufacturers annually and identifies various market trends. For instance, NAM’s 2007 survey found that more manufacturers have been able to pass on price increases than in previous years. Price increases have averaged about 4%. Manufacturers have had to raise their prices for two main reasons: competition (37%) and energy prices (35.9%).
These statistics can help small companies in price discussions with vendors and customers. Maybe you haven’t raised your prices in two years and an increase is long overdue. Maybe you haven’t raised your prices as much as other companies have. Maybe you have raised your prices because your energy costs have skyrocketed. Any “case” that you are presenting to your suppliers and customers can be enhanced by benchmarks.