If you could benchmark any KPI with your peers, what would you choose? I asked my clients — our Leaders Edge peer group members — for the metrics they consider most important to benchmark with their peers.
The list I got back was both practical and surprising. Some of these are standard, and others are insightful to the stage of growth each client is in.
Big picture metrics include:
- Net profit percent
- Gross profit percent
- Total payroll percent
For the family-oriented, these two metrics make sense:
- No. of vacation days (days off) per year.
- Net-to-owner profit dollars/hours worked.
For the growth and efficiency-minded, we have these:
- Overhead labor dollars / Production labor dollars
- Throughput (Gross profit / Labor hour)
- Non-billable efficiency percent
- Subcontractor mark up
For the team-building-minded, look at incentives and bonuses as a percentage of revenue
For the sales-minded:
- Hourly charge-out rate (and thus mark up on labor)
- Hourly labor cost
Ken Hutten, from Hutten & Co. in Ontario, Canada, a long-time member of our peer groups, said it best, “Other than standards like Np and Gm, it seems different for us every year. It feels like every time I need a metric or a comparable, it’s always there to find a quick answer, which is one of the biggest values I see in the peer group. So not just one, but that they’re all there.”
At Jeffrey Scott Consulting, we are offering a holiday discount of $1,000 off membership for those who sign up for our peer groups before the end of the year. To start the inquiry process, go here.
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