Use good data to drive your business
As a business owner, one of the most critical functions you perform is to keep abreast of where the marketplace is headed and how well your company stacks up.
I use ASA benchmarking tools in my business because they objectively help the decisions my team makes, which greatly helps our financial standing and ultimately the health of my company.
Having timely data and relevant statistics are critical to your company’s success as well to assist you in making confident and supported decisions. ASA has a stable of great business-intelligence tools that can support your business and the decisions you make as an owner.
Our annual Operating Performance Report benchmarks your company’s operational health against the distributors in your market. The OPR measures critical measurements such as:
Sales per employee: Don’t we all want to know how efficient our companies are operating? One of those key efficiency measures is what our sales dollars per employee is. According to the most resent OPR, the average sales-per-employee is $435,480.
Gross margin dollars per employee: Maybe your sales-per-employee number is a bit low but you make up for it with a higher margin and therefore your gross margin dollars per employee is in line.
Total operating expenses as a percent of sales for everybody in your industry: How does your company measure up with a reported 24.1% operating expense as a percent of sales? Wouldn’t that be valuable to gauge?
Gross margin percentage after rebates: You probably spend a lot of time talking about your gross margin but do you really know how you stand vs. your competitors?
I consistently use ASA’s OPR to know my company’s operating strengths and weaknesses. But most importantly, I use the data to work with my team to identify opportunities for operational improvement.
Understanding financial ratios and the impact of this type of analysis means the difference between simply operating a business and excelling in the industry. While it’s too late this year to submit your data, I urge you to purchase the 2016 report, become familiar with it, see how your market is performing and then make sure your financial team participates later this year in the 2017 report.
Another report I find extremely valuable is ASA’s Monthly Pulse Report which provides a regular monthly snapshot of performance for our industry. As an owner I’m always interested to know how my company is doing year-to-date in sales growth vs. all my competitors. Yes, a good year might be when you’re up 8-10%, but sometimes the market is not growing that much. If we’re up only 5 or 6% and the median is only up 3 or 4%, then we are gaining market share even though we’re not up a lot.
But you don’t know that unless you participate in the Monthly Pulse Report. I personally like this report because it breaks down the data across different sales volumes, industry segments, regions and specific state or metropolitan market areas for which there is a sufficient sample size and number of respondents. And like the OPR, I can share this report with my key staff, accountant and financial institutions so they know how we measure up.
ASA’s Compensation Report is an every-other-year compensation survey which was recently completed and is available to you. Retaining employees is critical in the business world that we live in. That means it’s essential that we keep good employees. Part of keeping those good employees is to make sure we’re paying them properly. What better way to know that than from ASA’s industry-wide study where you can learn what the median salary is for roughly 30 key positions in your company and how your company’s compensation and benefits packages compare to other wholesaler-distributors in our industry and throughout your market areas? When you consider that your company competes for the best employees with all the wholesaler-distributors in a given market area, the value of ASA’s Compensation Report becomes very clear.
I hope I have piqued your interest in the value of these reports that are available to you as an ASA member. You simply need to take the action to sign up and participate. If you are not a member of ASA, aren’t having these critical reports available to you worth the small investment to join the association? I urge you to join us today!