Knowing where your business stands relative to industry is key for setting goals and measuring growth as a business owner.

Canada is a hub for a number of businesses across various industries, each of which has different standards and financial performance indicators. To compare apples with apples, it is important to use industry-specific information in benchmarking your businesses progress.

 

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There are various differences among industries that impact a company’s growth rates, profitability, and other non-financial metrics that provide an insight into a company’s success. Non-Financial metrics are important to assess qualitative components of your business, or operational efficiency.

Below are industry-specific indicators, both financial and non-financial, you can use to measure your performance:

Food Services & Drinking Places

  • Average revenue per guest
  • Profit margin per table
  • Food cost percentage
  • Customer satisfaction vs. complaints

Manufacturing

  • Asset utilization
  • Cycle time
  • Mean time between failure (MTBF)
  • Order to shipment time

Retail Trade

  • Cost of goods sold (COGS)
  • Average inventory
  • Accounts receivable turnover
  • Sales per square foot of retail space

Construction

  • Project completion ratio: Actual vs. baseline
  • Number of accidents
  • Cost predictability
  • Cash balance

Transportation & Warehousing

  • Current book to fulfill ratio
  • On-time pickups and deliveries
  • Transit time
  • Monetary value of booked orders

Another important indicator is the Debt-Equity ratio, which measures the amount of financial leverage (credit/loans) you are utilizing relative to your owned assets. A low debt-equity ratio means you may not be utilizing debt efficiently to take on new projects or expand, while a high debt-equity ratio puts your business at a higher risk of bankruptcy. It is important to find a balance between the two, and access high-quality financing options at a sustainable interest rate.

Indicators allow you to refocus on areas of improvement, and track performance within these areas over a period of time using numeric methods. Tracking key performance indicators is important for maintaining a clear vision of where your business is headed.

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