Byob Bench Marking

ED TH IT IRD IO N

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HOW IS YOUR BUSINESS PERFORMING?

Business Q&A Service Answers to your business problems are only a mouse click away! Get personalised one-on-one support from EBC's team of small business experts and search the growing Q&A database. Information Resource Centre Packed with over 7,500 pages of essential business related solutions to help you in starting, growing & managing your small business. Franchising Access a wide variety of information and resources on franchising. You can even research the different franchise opportunities via the online franchise directory.

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BUSINESS BENCHMARKING GUIDES ALL YOU NEED TO KNOW ABOUT BENCHMARKING AND Designed by The Creative Page - www.creativepage.com.au

Visit our website now ebc.com.au is the address for small business. It’s the most targeted and comprehensive Australian small business site yet. Industry based information at your fingertips Access information on over 230 different researched industries and download free guide summaries instantly. Business Benchmarking Benchmark your current business (or prospective) against the rest of your industry to: compare your firm's performance, understand the key performance indicators, develop your own action plan. Huge Savings Online Enjoy HUGE Savings on Business Guides and Business Software when ordering online. Same day dispatch Australia-wide.

IMPROVING YOUR BOTTOM LINE. OVER 80 DIFFERENT INDUSTRY GUIDES TO CHOOSE FROM

Download free summaries from the EBC website: www.ebc.com.au

How well is YOUR business performing? Survival in today’s business climate requires you to spend more time working on your business rather than in the business. Are you confident that you know the answers to these important questions:

H ELPING PEOPLE S UCCEED I N B USINESS Foreword From the Managing Director, Entrepreneur Business Centre. Thank you for joining the thousands of Australian business people who have chosen the Entrepreneur Business Centre to assist them in better managing and growing their small business. Like so many of us, the desire to build a better future and achieve financial independence fuels our aspirations to build a successful business we call our own. Whilst it’s never an easy road, we cherish a unique satisfaction in cementing each milestone as we turn our dreams into reality. With the help of EBC and by using their Business Benchmarking Guides, you have taken an important step towards achieving business success. Traditionally embraced by "big business", benchmarking is not as scary and difficult as often thought. Used properly, it can be one of the most powerful management tools to help ensure the future viability of your small business. We hope that by empowering you with these small business benchmarking principles, industry statistics and action strategies we can better help you to achieve your goals. Our mission is to whole heartedly assist you in managing and growing your business by sharing with you many of the benchmarking principles that we employ within our own business. To this end, we will continue to develop innovative and affordable management tools to help you grow sales & profitability. To your success! Regards,

Greg Hart Managing Director Entrepreneur Business Centre. © Entrepreneur Business Centre (2002) 117 Stirling Highway, Nedlands, Western Australia 6009 Phone 1300 300 586 Fax 1300 300 983 International: Phone +618 9423 5200 Fax +618 9386 8382

• • • • •

Are you charging enough for your products & services? Are you spending too much on advertising? Are you paying too much rent? Are your staff costs too high? What is the average bottom line of your competitors?

Now, thanks to EBC, business owners and managers can get answers to these and many more critical questions. Answers that will enable you to better understand, manage and grow your business. Each industry specific Benchmarking Guide will help you: • • • •

See how your business compares against your competitors Understand how the rest of your industry works Analyse the key performance indicators of your industry Develop your own action strategies to improve your bottom line

Importantly, each Benchmarking Guide is updated annually allowing you to continually measure the effectiveness of your strategies. WHERE DO I START?

1. Read through all the information contained in this benchmarking booklet. 2. Call us on 1300 300 586 and we will send you summaries of your chosen Benchmarking Guides OR visit our web site at www.ebc.com.au to check out our special offers and download summaries of the guides. 3. Select the Benchmarking Guide relevant to your business. 4. Purchase the specific Benchmarking Guide covering your industry for only $295 (incl. GST) and we will deliver it, usually overnight. * Prices include GST & maybe subject to change.

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Why BENCHMARKING is important to YOUR Business Success Benchmarking isn’t some fancy new business theory. When you compare yourself to someone else or your golf or tennis game with your friends, you’re benchmarking. A ‘benchmark’ is a term originally used by surveyors. It’s a mark made on a rock or the wall of a building that forms a reference or measuring point. So a ’benchmark’ is a standard. The term has been used a lot in business circles over the last decade or so. It means the process by which a business systematically measures itself against a better performing business, and then adopts and adapts any functions or procedures shown to be more effective. Big companies have been benchmarking for years to improve their business. They use teams of people to think about all the different processes and how to do them better. Then they track each step of the process to uncover the underlying flaws. It calls for statistics gathering, in-depth analysis and action planning. With this information they compare themselves with "World’s Best Practice" to pinpoint the areas to improve. For example, in an automotive plant, the time taken to assemble a vehicle would be compared with a competitor’s assembly plant. If there were notable differences, the whole process of assembling the vehicle would be closely analysed to see what could be tightened up to make the process more efficient, and consequently, more cost effective. Likewise its accounts payable processes could be compared against those of a more efficient organisation, and better financial practices instituted to improve the company’s cash flow. This is all very well for large organisations that have large financial and staffing resources, but it’s not really practical, or even necessary, for small businesses. And, if you’re like most small business owners, you will be put off before you start. You will feel that you don’t have the time or the resources, or really the need, to follow those sorts of instructions, let along carry them out! This doesn’t mean that small businesses can’t or shouldn’t benchmark. Benchmarking is an extremely valuable process for any business. It needs to be part of all businesses ongoing planning for success. Especially your business success! So at EBC, we’ve developed a much simpler benchmarking process with small businesses like yours in mind.

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EBC’s Four Steps To Benchmarking Success 1. Analyse your business as it is now 2. Compare it with your competitors 3. Develop strategies to improve your performance 4. Implement the strategies The above process will help you to systematically assess your business and how it functions. It will help you to look at the different aspects of your business ranging from identifying the essential functions of your business, to your marketing strategies, your personnel management, and to all aspects of your financial management. Obtaining relevant financial statistics to help you compare the key areas of your business with those of your competitors is an important and often difficult area of benchmarking. These are called Key Performance Indicators (KPIs). Comparing your own statistics against those of your competitors will help to pinpoint areas of your business that could need improving. The key to benchmarking is obtaining good financial information about your own business. And you’ll also need information about other businesses like yours to compare. Then you can see where your strengths and weaknesses lie. As you know, it’s hard to get hold of your competitor’s statistics, as none of them will tell you how well or badly they’re doing (particularly when it involves their financials!). Luckily, there are publications available where you can access detailed financial statistics on a wide range of industries. One of the commonest results of financial benchmarking is discovering you are spending far too much in a particular area of your business. You’ll probably make lots of discoveries about your business once you open yourself to the process of financial benchmarking. That’s what makes benchmarking so exciting. You’ll want to make changes. You’ll find yourself saying "Look what they are doing. I’m sure we can do much better!" If you have a commitment to improving your business, and the drive to follow through with the required changes, you will find that your business does become more successful. EBC’s extensive range of business benchmarking guides will help you take a step back and look critically at your business’s performance - most importantly, without breaking the bank! Good luck and may your business prosper!

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ebc.com.au

I NDEX

the address for small business

AUTOMOTIVE

Auto Accessories & Spare Parts Retailers Auto Electricians Car Dealers - New & Used Motor Mechanics Smash Repairers Tyre Dealers

12 13 18 46 57 62

BUILDING & CONSTRUCTION

Visit our website now ebc.com.au is the address for small business. It’s the most targeted and comprehensive Australian small business site yet. Industry based information at your fingertips Access information on over 230 different researched industries and download free guide summaries instantly. Business Benchmarking Benchmark your current business (or prospective) against the rest of your industry to: compare your firm's performance, understand the key performance indicators, develop your own action plan. Huge Savings Online Enjoy HUGE Savings on Business Guides and Business Software when ordering online. Same day dispatch Australia-wide.

Business Q&A Service Answers to your business problems are only a mouse click away! Get personalised one-on-one support from EBC's team of small business experts and search the growing Q&A database. Information Resource Centre Packed with over 7,500 pages of essential business related solutions to help you in starting, growing & managing your small business. Franchising Access a wide variety of information and resources on franchising. You can even research the different franchise opportunities via the online franchise directory.

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Architectural Practices Bricklaying Contractors Building Contractors Cabinet Makers Concreting Contractors Consulting Engineers Consulting Surveyors Earthmoving Contractors Electrical Contractors Landscaping Contractors Plastering Contractors Plumbing Contractors Tiling Contractors

11 15 15 17 24 24 25 29 30 42 51 51 60

FINANCIAL SERVICES

Financial Planners & Investment Advisers Insurance Brokers Valuers

31 39 62

FOOD & HOSPITALITY

Bakeries & Hot Bread Shops Butchers Caravan Parks Coffee Lounges Fish & Chip Shops Fruit & Vegetable Retailers Motels Public Hotels Restaurants

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13 17 19 22 32 35 45 52 54

OTHER BUSINESSES

MEDICAL SERVICES

Chiropractors Dentists General Practitioners Medical Specialists Physiotherapists Veterinary Practices

21 28 37 43 50 63

Bus & Coach Operators Commercial Printers Couriers & Taxi Trucks Fitness Centres Metal Fabricators & Engineering Works Real Estate Agencies Road Transport Operators Travel Agencies

16 22 26 33 44 52 55 61

RETAIL BUSINESSES

Antiques, Art & Craft Galleries Bookstores Computer & Phone Sales Corner Stores / Mixed Businesses Electrical Appliance Retailers Fabric & Sewing Supplies Retailers Floor Covering Retailers Florists Footwear Retailers Furniture Retailers Giftware Retailers Hardware Retailers Jewellery Retailers Menswear Retailers Newsagencies Nursery & Landscaping Suppliers Office Supplies Retailers Pharmacies Rural Merchants Service Stations Sporting Goods, Toy & Outdoor Retailers Supermarkets Take-Away Food Retailers Women’s Fashion & Children’s Wear Retailers

11 14 23 26 30 31 33 34 35 36 37 39 42 44 46 47 48 49 55 56 57 58 59 64

SERVICE INDUSTRIES

Carpet Cleaners Child Care Centres Cleaning Contractors Dry Cleaners Hairdressers Painting Contractors Pest Control Contractors Taxi Operators

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19 20 21 29 38 48 49 60

BUSINESS MANAGEMENT SERIES

Writing An Effective Business Plan Smart Selling Successful Sales & Marketing Tax Made Easy Insurance & Protecting Your Business

67 67 68 69 70

Soon to be released Management Titles

• • • •

Financing Your Small Business Bringing Your Product To Market Managing Personnel Franchising Your Business BUSINESS INTERNET SERIES

Getting Your Retail Business Online Getting Your Service Business Online

71 71

For more information call 1300 300 586 or visit www.ebc.com.au QUICKEN ACCOUNTING SOFTWARE

Quicken Accounting & Investment Software

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MAUS BUSINESS SOFTWARE

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BUSINESS BENCHMARKING SERIES

What’s in an EBC Business Benchmarking Guide ? Each individual Benchmarking Guide title (over 80 of them) shows you step-by-step how to benchmark your business against your industry. Over 200 pages of essential information, split into 11 tabbed sections covering: • What is benchmarking • How to benchmark your business • Key performance indicators • Detailed industry statistics • Identifying your strengths & weaknesses • Action strategies • Managing costs & suppliers

• Managing cash flow • Managing personnel • Marketing strategies • Financial management • Benchmarking business planning • Business resources

The guide comes complete with an Excel-based Benchmarking Financial Software package ($105 value) which allows you to enter your financial data and analyse your business’ All All this this performance against the industry averages. for for only only The software even provides commentary of the * key areas of your business which need attention and suggests action strategies for improvement! The The best best Plus, as an added exclusive offer for guide purchasers, business business you can submit your performance results to our investment investment experienced benchmarking consultants who will you you will will check and review your performance for free ($105 ever ever make! make! value). We will then send you a more comprehensive & detailed analysis of your performance against the wider industry.

$295

Over 250 hours of 100% Australian Research in each title.

How to Use this Booklet This is an example of a typical listing: Coffee Lounges

# 4058

A key challenge is to have enough patrons come through the doors, ideally for a few ‘sessions’ each day. If the business trades only between 10am and 3pm, then occupancy and other fixed costs (eg lease or depreciation of equipment) become very high. So focusing on broadening the revenue base is important - perhaps promoting a take-away service; or providing lunches, morning or afternoon teas for some local businesses; or developing a breakfast trade can all increase revenue with no increase in rent or the cost of fittings etc. Staffing levels are important to manage well too - the right number of people will keep the total salary cost under control, yet still let the service staff be neither too over-bearing, nor too hard to get hold of! Indicator Total Income Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Other Occupancy Costs Other Depreciation, Lease and Hire Purchase Net Profit (bos)* Stockturn Rate Seats per Serving Person & including Working Owners # calculation excludes those firms which own their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had better personnel productivity • Had a higher turnover of stock

As you can see, each listing gives you a snapshot of each industry. First, a short overview of key issues affecting the industry. This is followed by a table detailing the average results for the major key performance indicators. These figures are based on actual businesses surveyed. Finally, a bullet point summary of the trends found in the more profitable businesses within the relevant industry. This is your starting point. You can then contact EBC on 1300 300 586 or visit their web site (www.ebc.com.au) to download free 20 page summaries of the specific Business Benchmarking Guide(s) you are interested in. You will note that each listing has a unique order code which identifies the relevant Business Benchmarking Guide containing more detailed industry statistics and strategies to grow your business & improve your bottom line. Disclaimer The benchmarking statistical data contained within this booklet represents averages for the sample of firms within the relevant industries. The statistics reported cannot be considered to be representative of all the enterprises in a particular sector, rather they are intended to provide an outline for an individual business to evaluate its performance against the wider industry.

* Plus $11 postage. Prices include GST and maybe subject to change.

Each manual comes in a durable vinyl binder, designed to handle years of daily use.

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Average $355,844 61.11% 18.26% 10.56% 3.36% 2.63% 17.84% 37 22

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What people say about

EBC’S BUSINESS BENCHMARKING GUIDES Rod Reidlinger, Waloon News, QLD

Mr Gary Tate, Foodland Associated Limited, Canningvale, WA

“

When my financial adviser recommended your Newsagency business benchmarking guide I was initially reluctant to outlay the money. Am I glad I did! I found your publication extremely helpful in guiding me to prepare for the purchase of my business. Its contents contained information that simply would not have been available to me from other sources. In fact, the information gave me $60,000 worth of negotiation power! Congratulations on a superior product.

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We have found the EBC Benchmarking Guide for Supermarkets to be extremely relevant and useful in the management and improvement of our contact businesses. The information has prompted us to initiate a more complete study of our clients and their businesses. The ability to compare and measure results will enable us to assist our contact stores to improve sales and profitability. In summary, we have found the Benchmarking information to be an invaluable management tool.

Robbie Cartwright, Mooroopna, VIC

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Chris Le Roy, Morningside, QLD

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We have found the EBC Benchmarking Guide for Road Transport Operators to be extremely useful. The guide provides an excellent insight into the industry. More importantly, it has assisted in highlighting areas that require improvement, enabling us to concentrate our energies to ensure a brighter future for our organisation. Thankyou EBC!

”

I was very impressed with the EBC Benchmarking Guide for Motels. It confirmed previous research and gave a good foundation of information from which the best decisions could be made. We highly recommend EBC’s Benchmarking Guides to anyone looking to improve their business or who is going into business as it is essential reading.

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Antique, Art & Craft Galleries

# 04014

Being surrounded by fine furniture, paintings, pottery or ceramics sounds like a ‘lifestyle’ rather than a ‘business’. Combining the two is the trick! Some stock here will be your own, just like any retail business; however, some stock will be kept on consignment, so you only pay for it after it’s sold. That eases some of the cash flow pressures. A flair for marketing is necessary to encourage potential customers to come through the door, so creating special interest groups, clubs and so on within your customer base is a good way to target the right customers. Personnel productivity needs to be managed carefully, as do other overheads… but the best businesses can integrate all these features to earn a good return from their work. Indicator Total Income Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Other Depreciation, Lease and Hire Purchase Interest, Bank Charges etc Vehicle Operating Costs All Other Expenses Net Profit (bos)* Sales & Display Area as a Percentage of Total Area Sales & Display Area (sq mtrs) per Sales Person , including Owners Trading Hours per Week Trading Days per Week

Average $182,221 52.16% 3.99% 5.12% 2.98% 4.98% 2.73% 2.82% 21.04% 87% 102 45 6

# calculation excludes those firms which owned their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had much higher personnel productivity • Had higher net profit margins due to lower overheads • Had better asset productivity

Architectural Practices

# 04012

Architects need certain skills and sensitivities - such as creativity, understanding the links between design and building methods, and being able to deliver designs that suit the client - as essential requirements for an architectural practice. To be a successful architect, and stay that way, you need to deliver and manage these services effectively. Some of the ways you can do that include: • Charging enough hours each week directly to clients’ projects • Watching the billing cycle so the cash keeps flowing through the business • Watching costs • Getting the staff and skill mix right Use this guide to help set the balance between the professional and the commercial. Architectural practices, like any business, can only keep providing their services if they practice careful financial management!

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Indicator Average Total Practice Income (thousands) $1,174.6 Wages and Salaries (staff only, not owners) and Payments to Contract Staff 30.89% Rent of Premises # 5.72% Other Depreciation, Lease and Hire Purchase 3.63% Independent Sub Contractors 6.22% Staff On-Costs 3.06% Print/Post/Stationery 2.91% Vehicle operating costs 3.51% Net Profit (bps)* 31.68% Days’ Debtors 44 Floor Area per Person (sq mtrs) 24 Hourly Charge Rate Principals $108 # calculation excludes those firms which owned their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were much larger, on average • Had lower non-salary overhead costs • Had higher staff costs, owing to the much larger number of employees and the higher proportion of employees in the total personnel mix • Tended to earn higher fees per person from more employees

Auto Accessories & Spare Parts Retailers # 04064 Customers often shop for auto after-market items, looking for ‘best price’. Once they decide not to have ‘genuine’ parts, the features and price of a part will drive the buying decision. Competitors are many and varied: car audio can be available from electrical appliance retailers; niche suppliers for car seats are also part of the competitive scene; and so on. One tactic is to “match our competitors advertised prices”. Secondly, a friendly atmosphere where sales staff give good technical advice establishes a different level of ‘service’. A key element in this equation is stock - it has both ‘customer service’ and ‘financial’ implications. Good customer service encourages more stock to be held - a wider range of products. The financial imperative is to minimise stock. A quick buy-in service helps balance these two competing ends, but it is not the complete answer. The better auto accessory retailers have high personnel productivity, get more gross profit per square metre of premises; at the same time, they’ve achieved higher gross profit and net profit margins too. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Interest, Bank Charges, etc Net Profit (bos)* Stock Turnover Rate Total Area per Person Percentage of Sales made to Account Customers Trading Hours per Week # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

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Average $789.3 29.50% 6.83% 4.22% 2.48% 8.24% 3.62 76 49% 53

To summarise, the more profitable businesses: • Were larger, on average • Had higher average net profit margins, resulting from higher gross profits and lower costs • Used their premises more efficiently, and for more hours per week • Had better personnel productivity • Had more owners’ equity within the asset base • Had better asset productivity, even though relatively more money was tied up in unpaid debtors’ balances

Auto Electricians

# 04066

‘Size does matter’, it seems! The larger and more profitable auto electrical businesses typically have more people on staff. This also means that you’ll need to spend more time managing them, as well as making sure they’ve got enough work to do. As you can see, ‘personnel’ and ‘marketing’ are two key aspects of the success of this type of business. How does your firm rate on these aspects? More importantly, what can you do to be better at both of them? Our Guide gives you practical pointers and skills to help you out. The Guide also shows the cost targets to aim for, and outlines the impact of lower or higher hourly rates on overall profitability. Indicator Total Income Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Other Depreciation, Lease and Hire Purchase Vehicle Operating Costs Net Profit (bos)* Stock Turnover Rate Days’ Debtors Hourly Charge Rate

Average $252,138 58.05% 9.84% 4.88% 2.05% 4.08% 27.60% 6.01 31 $42

# calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Had higher gross margins • Had higher staff costs, but better levels of staff productivity meant that the salary cost was kept to a suitable level • Had lower non-salary costs • Used owners’ equity to fund a higher percentage of a higher asset base • Required more assets per person, but still used those assets more effectively than the low-profit firms

Bakeries & Hot Bread Shops

# 04062

We could make lots of puns about how much ‘dough’ you make - or don’t make - from your business, but your business’ success is too serious for that! Good product is only one part of the mix that you need to succeed in this tough market. Your staff are critical. Do you have enough people on hand to bake and sell? Are your sales staff selling your product the best way? Are your service staff presenting the right image to your customers? Will it be worth your while -

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keeping the shop open for a few extra hours? Have you got enough customers walking by to justify it? This Guide shows you just how important your staff and trading hours are to the success of your business. You’ll also see the cost and profit targets of the best firms, to help you spot any areas where you need to improve. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Staff On Costs Rent of Premises # Other Occupancy Costs Interest, Bank Charges, etc Other Depreciation, Lease and Hire Purchase Net Profit (bos)* Stock Turnover Rate Total Area per Person (sq mtrs) Trading Hours per Week

Average $747.0 59.00% 22.74% 2.18% 5.18% 3.01% 2.17% 3.09% 13.81% 29 22 58

# calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had a higher revenue and gross profit per person • Had higher net and gross profit margins • Had higher levels of owners equity • Operated for more trading hours in the week, on average

Bookstores

# 04080

Competition from Internet and direct mail booksellers will impact on the traditional bookstore, but won’t necessarily put them out of business. Some shoppers still prefer picking up a book and leafing through it; some prefer buying ‘on the spot’ and taking the book straight home. These preferences let a traditional bookstore create and service its niche and in the process, meet customer needs and wants. The layout and feel of a store is important - easily visible titles, well organised and well lit are essential features. A range of stock covering various subject areas will appeal to key market segments - but that mix will vary with the location or other demographics of a local market area. Carrying a wide stock range must be balanced against the imperative to earn a good return on that stock. The better bookstores do it well, and sales show the benefit. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Advertising & Promotion and including Franchise/Group Fees Other Depreciation, Lease and Hire Purchase Net Profit (bos)* Stock Turnover Rate Sales Floor Area (sq mtrs)/ Sales Person (including owners) Trading Hours per Week # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

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Average $686.3 41.04% 7.29% 6.47% 5.62% 2.51% 10.60% 3.52 37 52

To summarise, the more profitable businesses: • Were larger, on average • Had higher levels of staff productivity • Had lower non-salary overheads • Had faster turnover of stock and achieved better return on stock levels • Had more assets per person but still achieved better asset productivity results • Had fewer owners per firm, where those owners also worked fewer hours per year

Bricklaying Contractors

# 04084

Bricklaying is a tough enough business as it is. There’s no point in making it financially hard on yourself as well. If you want to make your business productive you’ll need to keep your people working efficiently; get new work; juggle all the jobs; somehow fit in the small repair jobs; and make sure your workers have all the right materials at the right time. To work out how much money you should be making, you’ll need to set income targets, minus the cost of materials. And find ways of getting your materials more cheaply and keeping other costs down. You’ll also want to work on ways of getting larger jobs, since larger jobs return more profits because you’ll be doing less running around. The Guide shows you how to put all that together and get the best return from your time and effort. Indicator Total Income Materials Used Gross Profit Wages and Salaries (staff only, not owners) Vehicle Operating Costs Repairs & Maintenance Net Profit (bos)* Total Income per Person Average Jobs Completed per Trades Person (including Trades Qualified Working Owners)

Average $97,306 9.97% 89.19% 16.95% 9.12% 1.98% 50.94% $50,048 26

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had higher gross and net profit margins • Had higher staff productivity levels • Had lower non-salary overhead costs • Tended to generate more revenue and gross profit per job • Had much better higher asset productivity • Could better withstand a fall in business income

Building Contractors

#04054

Are you keen to learn some of the financial secrets of the trade, so you’re not just a victim of ‘boom and bust’? If so, you’ll need to make sure you’ve got a handle on a few things like: • Getting new work and making sure you make money on it • Juggling the mix of full-time employees and sub-contractors so that you’ll have flexibility in handling workloads, yet your costs will be predictable • Watching the overheads • Keeping an eye on the large amount of money you’ve got rolling around in the business so you don’t face financial surprises

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These things will take a bit of effort and some active management, but the rewards from following them through in the building industry can be very impressive. These issues - and more - are all addressed in the Guide, along with practical goals from the best firms, in an easy-reading style. Indicator Average Materials Used 39.10% Sub Contractors 21.74% Gross Profit 39.16% Wages and Salaries (staff only, not owners) 7.25% Vehicle Operating Costs 3.81% Net Profit (bos)* 19.83% Days’ Debtors 23 Hourly Charge Rates for Qualified Trades Staff $34 Average Jobs per Trades Person (including Trades Qualified Working Owners) 25 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, based on personnel numbers • Had lower non-salary overhead costs • Had more assets per person, but tended to fund a lower percentage with their own equity • Had higher staffing and sub-contractor costs, but not lower personnel productivity

Bus & Coach Operators

# 04096

Whether a bus company concentrates on subsidised school runs, or whether it works more extensively in the tour market, vehicle productivity is the key area to work on. More revenue per vehicle is the aim. It can be achieved in several ways, such as: • Running the bus for more hours each week • Running the bus over more kilometres per week (as long as there are paying customers on board!) • Increasing the occupancy factor and minimising the number of empty seats If these aspects are working properly, then the revenue should cover the fixed ownership costs and the variable operating costs. So devoting your attention to base pricing is important. And just as important is the way you target the organisations that can deliver paying customers regularly - it might be sporting clubs, or school excursions, or travel agents. This Guide will help you identify which area of your business needs the most work. Indicator Average All Vehicle Related Costs 39.36% Wages and Salaries (staff only, not owners) and any Sub-Contractor Payments 17.19% Staff On Costs 1.86% Interest, Bank Charges, etc 2.26% Net Profit (bos)* 30.21% Passenger Vehicles 10 Drivers (including Working Owners) per Passenger Vehicle 0.69 Average Kilometres Travelled per Bus/Coach per Week 1050 Average On-road Hours per Bus/Coach per Week 25 School Transport as a Percentage of Total Passenger Revenue 72%

Butchers

# 04098

Butchers are facing increasing competition from the chain supermarkets that offer longer trading hours and ‘one-stop’ convenience for a range of grocery items. So the traditional butcher needs to compete in several ways, such as: • Consistently high quality meats • A range of different meats (red meat, white meat and some specialist products, too) • Friendly service Then there are the ways to add value to a customer’s shopping - menu suggestions, semi-prepared foods, a ‘party planning service’ or a BBQ service. These are some of the ways of encouraging your customers to enjoy their meat, and to let you sell it to them, rather than someone else! While all this is happening, margin control is essential, as is a rapid turnover of stock to ensure its freshness. Minimising waste is a key way to improve profit margins, without needing to increase prices at all. This Guide will help you identify the areas of your business that can be improved. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Net Profit (bos)* Stock Turnover Rate Sales Area as a Percentage of Total Area Total Area per Person (square metres) Trading Hours per Week Percentage of Sales made to Account Customers

Average $557.1 34.44% 9.04% 4.02% 11.10% 93 40% 27 52 19%

# calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Had higher gross and net profit margins • Had higher staff costs, but higher personnel productivity • Had lower non-salary overhead costs • Had more of the firms’ assets funded by owners and required a higher level of assets per person to operate • Had a much higher rate of stock turnover • Traded for more hours per week

Cabinet Makers

# 04100

To summarise, the more profitable businesses: • Had lower non-salary overhead costs • Had higher personnel productivity • Had better productivity per passenger vehicle - more on-road hours and more kilometres per week, leading to higher revenue per vehicle

Managing materials costs and personnel productivity are two important factors for successful cabinet making. Just as important though, is to get the right level of revenue and gross profit from the premises. It affects the amount of spare space available, the cleanliness and safety issues, as well as the overall operating efficiency. Since the rental cost can be a significant item (or the interest and running costs in freehold premises), using the available area efficiently is a key factor for the larger firms and the more profitable ones. The firms that had high personnel and high premises’ productivity achieved higher profits. This Guide will help you identify these important areas in your business.

16

17

*(bos) before owners’ salaries and benefits

Indicator Average Total Income (thousands) $598.0 Gross Profit 52.40% Wages and Salaries (staff only, not owners) 14.26% Rent of Premises # 3.81% Other Depreciation, Lease and Hire Purchase 2.93% Vehicle Operating Costs 2.91% Net Profit (bos)* 18.65% Days’ Stock & Work-In-Progress 32 Days’ Debtors 37 Workshop Area per Production Person including Working Owners (square metres)143 Trading Hours per Week 44 # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Had higher staffing costs, but higher personnel productivity • Had lower non-salary overhead costs • Had higher gross profit margins • Used their premises much more efficiently • Required more assets per person

Car Dealers - New & Used

# 04108

Big investments, extreme competition, low margins and susceptibility to outside influences such as interest rates: that’s a vehicle dealership. It’s too easy to have very large amounts tied up in stock, so setting simple, clear yet achievable sales targets for each seller is an important part of the management routine. Then helping the sellers to achieve their targets is next - having the right product available for sale, and promoting both the dealership and the specific stock all contributes to the total sales effort. Balancing the revenue mix between sales, service, spare parts, and possibly some insurance or finance commission gives at least some comfort in meeting each week’s costs. It’s a tough business, but it can be a profitable one if theses key areas are controlled well. This Guide will help you sort out these issues. Indicator Average Gross Profit 14.07% Interest 1.08% Rent of Premises 1.32% Wages and Salaries – Sales, Parts & Administration Staff Only 2.71% Net Profit (bos)* 4.50% Stockturn Rate 7 New & Used Vehicles Sold per Salesman, including Working Owners 56 Vehicle Sales as a Percentage of Income 96% Sales & Display Area as a Percentage of Total Area 66% Total Area per Person (sq mtrs) 334 Trading Hours per Week 50 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Had much higher personnel productivity • Had lower overhead costs • Required more assets per person but used them more efficiently

18

Caravan Parks

# 04076

After you have committed to buying or leasing a caravan park, the big challenge is to manage your occupancy rate. It needs to be high enough to cover your costs, service the business loans and still leave some profit for all those hours that owners generally work. That means a combination of marketing and promotion activity to keep the patrons coming. It also means having clean, well-presented and attractive premises to catch an unfair share of the drive-by market, too. Creating relationships with bus and tour companies will be important here. Working on occupancy alone is a key part of achieving a more profitable caravan park. It gives you the flexibility to get personnel productivity right and to get a suitable return on the assets of the firm. Everything flows from occupancy. Indicator Total Income Cost of Goods Sold at Retail Wages and Salaries (staff only, not owners) Other Occupancy Costs Other Depreciation, Lease and Hire Purchase Replacements, Repairs, Maintenance and Hire of Plant & Equipment Rent of Premises # Interest, Bank Charges etc Vehicle Operating Costs Net Profit (bos)* Total Income per Person Owners Equity as a Percentage of Total Assets Asset Turnover Average Occupancy Rate

Average $275,745 6.27% 7.03% 12.18% 9.47% 8.11% 16.53% 8.22% 3.10% 27.59% $84,657 64.32% $0.55 54%

*(bos) before owners’ salaries and benefits # calculation excludes those firms which own their own premises

To summarise, the more profitable businesses: • Were larger • Had higher personnel productivity, offset slightly by higher costs per person • Had a higher occupancy factor • Had more assets per person, probably due to the impact of ownership of premises

Carpet Cleaners

# 04112

It’s really all about personnel productivity in this sector. How do you promote the business so that there’s a regular flow of work in the course of a week, and keep that going throughout the year? Then, of course, there’s the planning of how and when to do each job, so that downtime is minimised. Whether the business is part-time or full-time, it’s all about keeping people productive. Larger jobs help slightly, but that’s not the complete answer. Once a firm reaches a certain ‘critical mass’ of about $70,000 of turnover, then these things get easier to manage. This Guide will help you to make a clean sweep of your business’ productivity issues.

19

Indicator Average Total Income $72,524 Gross Profit 92.58% Wages and Salaries (staff only, not owners) and any Sub Contractor Payments 8.88% Advertising and Promotion 5.90% Other Depreciation, Lease and Hire Purchase 5.81% Repairs and Maintenance 2.36% Telephone and Fax 3.62% Interest, Bank Charges, etc 3.20% Vehicle Operating Costs 14.08% Net Profit (bos)* 40.16% Average Jobs per Cleaner per Year (including Working Owners) 435 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had lower non-salary overheads • Had higher personnel productivity • Completed more jobs per cleaner per year

Child Care Centres

# 04118

The prevalence of either single-parent or double-income households pushes the demand for child-care and pre-school places. Even with strong demand, there is still great pressure on delivering top quality care within a controlled cost structure. One of the key cost challenges is to earn enough revenue from a centre’s ‘fixed costs’: occupancy costs (whether interest and operating costs on a freehold building, or rent on a leased site), and equipment too. A core of full-time staff can be supplemented by more-flexible arrangements with casuals or part-timers, to help keep this equation in balance. Larger revenue or a larger facility can make it easier to operate at a profit (or at least not at a loss!), and the ‘freehold’ vs ‘leasehold’ debate is important in the overall profit mix. This Guide provides answers in these key areas. Indicator Average Total Income $302,447 Consumable Items & Educational Resources 3.06% Staff On Costs 4.00% Wages and Salaries (staff only, not owners) 46.94% Rent of Premises 4.31% Food & Drink 3.02% Other Depreciation, Lease and Hire Purchase 2.88% Interest, Bank Charges, etc 4.07% Net Profit (bos)* 19.71% Net Profit Margin after Owners’ Notional Salary# 2.23% Subsidies Received as a Percentage of Total Income 49% Indoors Area as a Percentage of Total Area to which Children have Access 36% Enrolments 3.99 Operating Hours per Week 56 Weeks Centre Open per Year 51 Maximum Enrolments at Any One Time 48 Children @ 30 June as Percentage of Maximum Enrolment Capacity 86% Children @ 30 June per Person 6.3 Children @ 30 June per Qualified Pre-school Person and including Working Owners 9.79 *(bos) before owners’ salaries and benefits # including owners’ notional wage of $15 per hour

20

To summarise, the more profitable businesses: • Had better personnel productivity • Had lower non-salary overheads • Required less assets per child • Were less likely to own their premises

Chiropractors

# 04042

Managing the number of consultations per chiropractor is a key focus in this sector. This can be done by efficient rostering of patients, and by making sure the practice is open for hours that suit the customermix, too. That, of course, is after the principals have profiled the practice in key areas - eg local businesses, or sports clubs and so on. Practices delivering higher profits have achieved much higher personnel productivity; their non-salary expenses are lower; they have also retained more of those profits in the practice and so rely less on outside debt. Indicator Total Income Other Depreciation, Lease and Hire Purchase Wages and Salaries (staff only, not principals) Rent of Premises # Staff On Costs and including Professional Development Costs Drugs, Supplies and Consumables Vehicle Operating Costs Net Profit (bps*) Average Consult Length (minutes) Average Number of Consults per Chiropractor per Week Consultation Time as a Percentage of 38 Hour Week Opening Hours per Day Opening Days per Week

Average $207,638 4.11% 17.69% 7.40% 3.71% 3.50% 3.66% 45.98% 21 105 79% 8.10 5.08

# calculation excludes those firms who owned their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were larger • Had higher personnel productivity levels • Spent lower percentages of income on many of their practice overheads. • Had more of their assets funded by principals • Had lower asset turnover • Had more support staff per practitioner

Cleaning Contractors

# 04074

The key focus here is to maintain or improve personnel productivity levels, while delivering high quality work. Wages are a very high proportion of cost in a cleaning firm - a firm can be exposed if it does a lot of ‘fixed rate’ contracts but can’t control the time. If a firm relies largely on the owner’s time, then these issues are easy to monitor; once a firm becomes bigger (eg having say 4 or 5 staff), then ‘management’ of the productivity becomes harder and more expensive. Targets and formulae will help here - how long to vacuum 100 square metres of office space? - and so on. Developing time-based targets within a firm will help to monitor and control productivity. At the same time, larger firms get a benefit through better return on its costs - especially the vehicle-related and equipment costs. So there is pressure to become larger, but expansion needs to be managed effectively.

21

Indicator Average Materials Used 4.24% Wages and Salaries (staff only, not owners) plus Payments to Sub Contractors 21.24% Other Depreciation, Lease and Hire Purchase 2.62% Vehicle Operating Costs 9.10% Net Profit (bos)* 51.66% Hourly Charge Rates for Cleaners $21 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had less of their assets funded by owners, and used relatively less assets

Coffee Lounges

# 04058

A key challenge is to have enough patrons come through the doors, ideally for a few ‘sessions’ each day. If the business trades only between 10am and 3pm, then occupancy and other fixed costs (eg lease or depreciation of equipment) become very high. So focusing on broadening the revenue base is important - perhaps promoting a take-away service; or providing lunches, morning or afternoon teas for some local businesses; or developing a breakfast trade can all increase revenue with no increase in rent or the cost of fittings etc. Staffing levels are important to manage well too - the right number of people will keep the total salary cost under control, yet still let the service staff be neither too over-bearing, nor too hard to get hold of! Indicator Total Income Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Other Occupancy Costs Other Depreciation, Lease and Hire Purchase Net Profit (bos)* Stockturn Rate Seats per Serving Person & including Working Owners

Average $355,844 61.11% 18.26% 10.56% 3.36% 2.63% 17.84% 37 22

# calculation excludes those firms which own their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had better personnel productivity • Had a higher turnover of stock

Commercial Printers

# 04038

Productivity and cost control are the secrets of a profitable printing business. What could be easier? Personnel productivity is a key area to keep working on: • Having a mix of trades-qualified people, with some apprentices or labourers to keep the skills needed at the right level • Having access to some casuals or part-timers to meet the inevitable deadlines and for those jobs which had to be done yesterday • Making sure that quality control is in place while the job is running not after the event when it’s too late

22

These are operational decisions that need to be made daily and weekly to keep the workload running smoothly. Use the Guide to see the financial targets that result from managing the productivity equation, then see the cost targets that will ensure you get to keep the right amount of profit! Indicator Average Gross Profit 65.52% Sub Contractors 4.03% Rent of Premises # 3.15% Other Depreciation, Lease and Hire Purchase 8.06% Wages and Salaries (staff only, not owners) 20.67% Net Profit (bos)* 14.64% Stockturn Rate 16 Days’ Debtors 60 Production Area (sq mtrs) per Production Person (including owners) 48 Trading Hours per Week 46 % of Sales to Account Customers 91% # calculation excludes those firms who owned their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger in size • Had higher personnel productivity levels, but higher staffing costs • Had lower non-salary overhead costs • Had relatively more assets, where a higher percentage of those assets were funded by the owners, too

Computer & Phone Sales

# 04124

Capitalising on Australians’ desire to adopt new technology can create a profitable business. Computer and phone sales are leading the charge. This Guide shows the importance of margin control - including the value of the commissions from phone sales. The larger and more profitable firms each report higher gross profit margins, so it is possible to achieve volume and profit at the same time. Personnel productivity is a key feature of the better firms, too. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) and any Payments for Sub-contracted Work Net Profit (bos)* Stock Turnover Rate Days’ Debtors Sales Area as a Percentage of Total Area Total Area per Person (square metres) Trading Hours per Week Sales on Account

Average $876.5 29.72%

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher gross and net profit margins • Had better personnel productivity • Had lower asset productivity due to higher assets per person • Had owners who funded more of the firms’ assets • Had poorer stock management.

23

6.22% 12.05% 15 37 45% 33 43 53%

Concreting Contractors

# 04094

Owners in this sector have the usual commercial challenges - finding enough work to keep themselves and staff busy for enough hours of the week; managing personnel productivity effectively; and keeping a lid on costs of materials and overheads. Then there are the pricing decisions - how much to charge for labour and how much to mark-up those materials. Now throw in an extra uncertainty from the weather! That factor alone can increase the ‘unproductive time’ during a week, and make it a little tougher to earn a suitable income. Keeping on top of unpaid accounts is important, too. Large write-offs because a customer or a builder doesn’t pay means a lot of time and materials for nothing - literally! Indicator Total Income Materials Used Sub Contractors Gross Profit Interest, Bank Charges etc Wages and Salaries (staff only, not owners) Other Depreciation, Lease & Hire Purchase Repairs and Maintenance Vehicle Operating Costs Net Profit (bos)* Days’ Debtors Average Jobs Completed per Year per Tradesperson (including Trades Qualified Owners)

Average $220,735 33.13% 13.20% 53.67% 2.16% 8.51% 2.59% 2.17% 6.87% 23.79% 33 40

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger in size • Had higher staff costs, and also had higher personnel productivity • Had higher gross and net profit margins • Had lower non-salary overhead costs • Had much better asset productivity • Used less owners’ equity relative to total assets

Consulting Engineers

# 04048

Higher personnel productivity is an important factor here - workloads in engineering firms can fluctuate wildly and quickly. Quick and nimble responses are needed from the management team. Look to areas such as: • Higher hourly rates, or an alternative basis of charging that reflects the work performed as well as the value of that work • Less time being ‘written off’ or not charged • The number of hours per person per year • Using sub-contractors or fixed-term staff in the interest of flexibility. As a bonus, if the staffing mix has relatively ‘more’ staff and relatively ‘less’ principals, then the benefits of the other achievements rapidly translate to higher profits per principal As a personnel-based business, success will be that much harder in practice!

24

Indicator Average Other Depreciation, Lease and Hire Purchase 3.49% Wages and Salaries (staff only, not principals) and Payments to Contract Staff 33.57% Independent, arms-length sub-contractors 5.26% Rent of Premises # 3.72% Staff on-costs 2.95% Vehicle Operating Costs 2.77% Net Profit (bps)* 35.88% Days’ Debtors 52 Floor Area per Person (square metres) 20 Hourly Charge Rate Principals $98 # calculation excludes those firms which owned their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were larger, on average • Had higher personnel productivity, reflecting in part their higher hourly charge rates per principal • Had more staff but virtually the same number of principals, on average • Had more dollars of equity invested in the practice • Had principals who worked for more hours per year

Consulting Surveyors

# 04056

Maintaining a high level of personnel productivity, and having a staff structure with more employees per principal are two key factors that will determine the overall profit of a practice. Both these aspects mean that a practice needs to have the right people, well trained, and who are allocated to the right level of work. It can’t be too demanding relative to their skills, nor is it productive to have ‘over-qualified’ people working on a task that could be easily done by someone less skilled. More employees per principal calls for a system where the principals can delegate decision-making and have confidence in the result. Cost control and prompt turnover of work-in-progress and debtors rounds out the picture for the effective management of a surveying practice. Indicator Average Total Income (thousands) $1,239.3 Other Depreciation, Lease and Hire Purchase including Computer Costs 4.45% Wages and Salaries (staff only, not owners) and Payments to Contract Staff 36.15% Rent of Premises # 3.72% Independent Sub Contractors 3.12% Staff On Costs 3.46% Vehicle Operating Costs 4.46% Net Profit (bps)* 29.08% Days’ Debtors 48 Floor Area per Person (square metres) 17 Hourly Charge Rate Principals $104 # calculation excludes those firms which own their own premises *(bps) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher personnel productivity • Had more staff per principal • Had higher levels of principals’ equity

25

Corner Stores / Mixed Businesses

# 04130

With increased competition from large supermarkets, finding a local market niche is critical for a corner store. Many have focussed on fast food; many altered their trading hours; many are simply closing their doors. It is possible to achieve better gross profit margins, with better stock management too. Just as importantly, it is possible to achieve a $700,000+ turnover to make all this fit together. This is what the best firms are doing right now. They’re also getting better productivity from their people, and spending relatively less on general overheads. The key point for every operator to understand though, is that focusing on margins, costs and productivity will pay big dividends for the owners - no matter what the turnover might be. Indicator Average Total Income $475,326 Gross Profit 22.03% Interest, Bank Charges etc 2.02% Rent of Premises # 3.74% Other Occupancy Costs 1.60% Wages and Salaries (staff only, not owners) 3.77% Net Profit (bos)* 8.63% Stockturn Rate 20 Sales Area as a Percentage of Total Area 76% Sales Floor Area (square metres) per Sales Person (including owners) 55 Trading Hours per Week 79 *(bos) before owners’ salaries and benefits # excludes those businesses without a rental expense

To summarise, the more profitable businesses: • Were larger • Had much higher personnel productivity, keeping the wages cost in check • Used their premises more efficiently • Had higher gross and net profit margins • Required much higher levels of assets per person, yet still achieved better asset productivity

Couriers & Taxi Trucks

# 04138

Indicator Total Income Vehicle Related Costs Independent Contractors Wages and Salaries (staff only, not owners) Gross Profit All Occupancy Costs Telephone and Fax Net Profit (bos)*

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Average $148,761 25.31% 4.80% 13.20% 56.69% 3.82% 2.21% 42.39%

www.sg.com.au 3994

The freight game can be a tough one. Margins are continually under pressure and several major costs are outside an operator’s control. That leaves the operators little room to manoeuvre - good driving habits and proper vehicle maintenance will minimise long-term vehicle cost, and also keep the on-road hours up. Pricing needs to be watched closely, and any profitless contracts need to be either fixed, or lost. One of the main aims in a commercial sense is to get a return on the assets of the business - many costs are fixed and so until the volume rises, profits will be hard to achieve. So marketing and service are important, to shift as much focus as possible away from price alone.

Vehicle Fleet Freight Carrying Vehicles Average On-road Hours per Vehicle per Week Typical Days per Week Vehicles on the Road Average Kilometres Travelled per Hour Average Kilometres Travelled per Day

2.27 37 5.3 28 190

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had better personnel productivity, which kept the higher staffing cost under control • Used their freight vehicles more productively to earn revenue • Had owners who worked for more hours per year

Dentists

# 04052

Successful dental practice is all about patient-care: high quality, contemporary service; regular patient contact; and good interpersonal relations between dentist and patient. With these aspects in place, business management skills come to the fore. Productivity is a key area - optimising the consults per professional will increase productive (or fee-earning) time and reduce the nonchargeable time. More revenue per dentist will flow automatically. Dentists need to be supported effectively by dental nurses or technicians etc, and also need breaks during the day to balance their workload. Costs per person tend to rise in the more profitable firms, but nowhere near as much as revenue per person - that leads directly to more total profit. When that formula works well, profits per principal will rise. Indicator Total Income Wages and Salaries (staff only, not owners) Rent of Premises # Drugs/Supplies/Consumables Interest, Bank Charges etc Laboratory Fees Other Depreciation, Lease and Hire Purchase Staff On Costs Net Profit (bps*) Support Staff per Dentist Fees Rendered to Account Average Consult Length (minutes) Average Number of Consults per Dentist per Week Opening Hours per Day

Average $464,662 27.18% 5.81% 9.68% 2.33% 6.47% 4.48% 2.19% 33.21% 2.20 23% 30 67 9

# calculation excludes those firms which own their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were larger • Had lower non-salary overhead costs and higher net profit margins • Generated a higher revenue per consultation • Had more support staff per Dentist, but still achieved higher overall personnel productivity. The higher productivity caused salaries to fall as percentages of total income • Had more of their consultation fees paid by account

Dry Cleaners

# 04140

Trading times, prompt turnaround of items being cleaned, and high quality work - three key aspects of an effective dry cleaning business. Marketing plans should focus on becoming ‘the cleaner of choice’, in order to build up a solid group of repeat customers. Consider too, the merit of developing specialties in certain types of garment, or curtains, etc. Having worked on the ‘top line’, then start looking at the bottom line controlling costs, and having a sufficient number of people on board to provide the promised level of service and turnaround. Indicator Cost of Materials Used Gross Profit Interest, Bank Charges, etc Rent of Premises Other Occupancy Costs Other Depreciation, Lease and Hire Purchase Repairs, Maintenance, Hire of Plant and Equipment Vehicle Operating Costs Wages and Salaries (staff only, not owners) Net Profit (bos)* Trading Hours per Week *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had higher gross and net profit margins • Could withstand greater falls in business revenue • Had lower non-salary overhead costs • Had better personnel productivity but higher staffing costs • Had better asset productivity

Earthmoving Contractors

# 04034

This business calls for large-scale investments in earthmoving plant and sometimes these items of plant need a special-purpose truck to move them between jobs. Add in an operator’s wage, and it is clear that hourly charge rates are an important issue for a firm to manage. So too is the amount of productive time that each machine operates per week. Larger jobs are better since they require far less unproductive ‘transport time’ between jobs, and so maximise the possible chargeable time. So while one issue is to manage the productive time and the hourly rate (equals income!), another related factor is to keep the plant running efficiently - regular maintenance, careful judgements about whether to repair or replace key components become critical on the costmanagement side. Indicator Plant-Related Operating Costs Sub Contractors Materials, Royalties and Loading Fees Wages and Salaries (staff only, not owners) Net Profit (bos)* Days’ Debtors Items of Plant Earthmoving Plant Other Vehicles All Vehicles Drivers per Earthmoving Plant (including Working Owners) Average Weekly Operating Hours per Earthmoving Plant Item *(bos) before owners’ salaries and benefits

28

Average 10.96% 89.04% 3.24% 9.30% 4.22% 5.44% 3.26% 4.09% 24.43% 24.04% 53

29

Average 40.78% 3.62% 8.71% 12.92% 22.68% 27 5.69 3.94 9.63 0.78 35

To summarise, the more profitable businesses: • Tended to be larger • Had lower non-salary overheads, in spite of spending more on subcontractors and on ‘materials’ • Generated more income per piece of earthmoving plant

Electrical Appliance Retailers

# 04046

Here is a competitive and ‘commoditised’ industry - identical models are offered at different prices by different retailers, so customers often shop for the best price. Several options help break this cycle. Firstly, a firm can offer to ‘match our competitors’ advertised prices’. Secondly, a friendly in-store atmosphere where sales staff give good technical advice establishes a different level of ‘service’. Thirdly, a delivery service is important, especially for bulky whitegoods. And so on. Financial imperatives include adapting to the nature of the industry: watch costs and personnel productivity. Better stock management is a feature of the high profit firms, too. Indicator Gross Profit Advertising & Promotion Wages and Salaries (staff only, not owners) Rent of Premises # Interest, Bank Charges, etc Net Profit (bos)* Sales per Person Stockturn Rate Trading Hours per Week Percentage of Sales made to Account Customers

Average 25.00% 1.53% 7.67% 2.42% 1.45% 6.56% $266,325 5.74 50 21%

# calculation excludes those firms which own their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher gross and net profit margins • Generated more revenue and gross profit per person • Had better stock management • Had higher levels of owners’ equity

Electrical Contractors

Here is a sector where the ‘classic’ profitability measures such as higher personnel productivity and lower overheads are still important, yet their impact is multiplied by the impact of a firm’s ownership structure. Put simply, the ownership of firms are tightly held - normally only one or two active owners per firm, irrespective of the turnover level. As the turnover increases, the extra profits generated by the extra people are concentrated in the hands of virtually the same number of owners - as a result, the profit per owner increases quickly, even though net profit margins generally fall for the larger firms.

30

6.04% 27.27% 20 33 $38 286

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger on average • Had higher personnel productivity levels, reflecting the combination of higher hourly charges, larger jobs and more jobs per tradesperson • Spent less of their turnover on non-salary overheads • Had lower material costs

Fabric & Sewing Supplies Retailers # 04142 Profits in this business can be boosted by continually lifting personnel productivity; maximising the sales and gross profit per square metre of premises; and by controlling costs. Optimising stock levels makes a difference too, and is especially important because stock turnover is relatively slow. With stock being managed actively, this also flows through into better overall asset productivity. The good news is that the better firms in the industry do this and achieve a higher gross profit margin! Indicator Average Total Income $313,102 Gross Profit 41.70% Advertising & Promotion – including Franchise/Group Fees 2.48% Rent of Premises 6.82% Wages and Salaries (staff only, not owners) 9.82% Net Profit (bos)* 13.34% Stockturn Rate 2.29 Sales Floor Area (square metres) per Sales Person (including owners) 71 Trading Hours per Week 46 *(bos) before owners’ salaries and benefits

# 04028

Indicator Materials Used Sub Contractors Gross Profit Wages and Salaries (staff only, not owners) Other Depreciation, Lease and Hire Purchase

Vehicle Operating Costs Net Profit (bos)* Days’ Stock on Hand Days’ Debtors Hourly Charge Rate Qualified Trades Staff Average Jobs per Trades Person

Average 44.00% 1.96% 54.03% 8.65% 2.10%

To summarise, the more profitable businesses: • Had better personnel productivity • Used their premises more productively • Had higher net profit margins due to higher gross profits and lower overheads • Had better asset productivity, due in part to better stock management

Financial Planners & Investment Advisers # 04078 The ageing population is increasingly looking to fund more of their own retirement lifestyle - as a result, this sector is growing rapidly. A financial planner can be a stand-alone, specialist business, or it can be part of another business - an accounting practice, for example. Longterm success comes from giving reliable advice which suits a client’s situation, and matching that advice with good-quality financial products. Good interpersonal skills should not be underestimated. Some of an investment adviser’s time might be sold on an hourly basis; some might be linked to commission. In either case, keep a tight watch on the income generated per working hour - otherwise, profits can be threatened very quickly.

31

So, productivity management and cost control are important business drivers to watch - yet they are worth nothing if the advisor’s reputation is tainted by unsuitable investment plans. Indicator Total Income (in thousands) Wages and Salaries (staff only, not principals) Rent of Premises # Computer-related costs Printing, Postage and Stationery Staff On Costs All Other Expenses Vehicle Operating Net Profit (bps)* Total Income per Person Total Area (square metres) Floor Area per Person (square metres)

Average $488.3 24.17% 6.73% 3.04% 3.00% 3.42% 3.52% 2.60% 43.18% $88,823 164 35

# calculation excludes those firms which own their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable businesses: • Were generally larger • Had lower total and non-salary overheads, leading to higher net profit margins • Had higher personnel productivity and also used their premises more intensively • Had relatively more staff and a reasonably constant number of principals • Had lower principals’ equity relative to total assets

Fish & Chips Shops

# 04144

‘Freshness’ and ‘value’ are important notions in this industry. More competition comes from other fast food outlets than comes from other fish and chips shops, generally. Fast turnover of stock, coupled with proper storage and cooking techniques will be important in a firm’s success. Then the cost structure of the firm and the personnel productivity control come into play. The final factor that makes a big difference to profitability is the ownership structure - having ‘more’ employees and ‘fewer’ owners in the personnel mix simply concentrates the profits form many people’s efforts into the hands of a small number of owners. Indicator Average Total Income $437,782 Gross Profit 46.14% Rent of Premises 3.59% Other Occupancy Costs 4.20% Other Depreciation, Lease & Hire Purchase 2.28% Wages and Salaries (staff only, not owners) 12.35% Net Profit (bos)* 13.47% Stockturn Rate 47 Fresh Fish as Percentage of Total Sales 11% Sales & Food Preparation Area as Percentage of Total Area 88% Sales and Food Preparation Area per Sales Person (including owners) in square metres 25 Trading Hours per Week 65 *(bos) before owners’ salaries and benefits

32

To summarise, the more profitable businesses: • Were larger • Had better personnel productivity, but higher staffing costs • Had lower non-salary overhead costs • Required more assets per person • Had much faster turnover of stock.

Fitness Centres

# 04092

Large investments in equipment and facilities must be balanced with a high retention rate of customers, paying monthly or quarterly memberships. ‘Lots of members’ is a good thing, too, although the size of the facility puts a limit on this. Marketing should be based on target numbers of new members each month, to compensate for the drop outs and hopefully grow the business. Decide also, the amount of emphasis to be put on ‘use of facilities’ vs the ‘retail’ add-ons (clothing, food supplements, drinks, and so on). The better firms control their costs and have higher personnel productivity - these are easier to manage when the usage per session or per class can be reliably estimated - which brings us back to the importance of regular, active members! Indicator Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Advertising & Promotion and including Franchise/Group Fees Interest, Bank Charges, etc Repairs and Maintenance Other Occupancy Costs Other Depreciation, Lease and Hire Purchase Net Profit (bos)* Percentage of Revenue Prepaid at Time of Use Trading Hours per Week

Average 88.49% 20.62% 12.34% 6.98% 5.20% 3.68% 5.69% 6.97% 15.36% 40% 66

# calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher staff costs, but higher levels of personnel productivity • Had higher gross profit margins, but slightly lower net profit margins • Had better asset productivity • Had more revenue from regular members

Floor Covering Retailers

# 04146

Having the ‘right range’ of stock for the target market, a well laid-out store and a good location are basic ingredients in successful retailing. Quick access to stock on a ‘buy in’ basis is another special requirement in floor covering retail, so that stock levels can be minimised without compromising the quality of service. A third ingredient is to achieve maximum sales at regular margins (before the ‘end of range’ and ‘help we’re overstocked!’ sales have to start). When these aspects are working properly, the other management ratios start to look after themselves - sales and gross profit per person, or stock turnover. Cost control is an important factor in this sector, since higher sales levels often put a business in direct competition with the larger chains and corporates, so low cost needs to accompany lower margins.

33

Indicator Average Total Income (in thousands) $727.5 Gross Profit 34.20% Interest, Bank Charges etc 2.03% Rent of Premises 2.75% Wages and Salaries (staff only, not owners) and Payments to Contract Laying Personnel 11.66% Vehicle Operating Costs 2.71% Net Profit (bos)* 7.59% Stockturn Rate 8.78 Days Debtors 34 Sales Area as a Percentage of Total Area 64% Sales Floor Area (square metres) per Sales Person (including owners) 104 Trading Hours per Week 45 Percentage of Sales made to Account Customers 68% *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had much higher personnel productivity • Had lower gross profit margins, offset by lower non-salary overhead costs • Had better stock and asset turnover • Had owners who worked less hours per year

Florists

# 04150

Better personnel productivity is one of the key contributors to higher profits in this industry, but attention to ‘profitable sales’ has to come first - without sales, there’s no point watching productivity! A well-located business, with an attractive display of flowers and accessories is a start. Locating a larger number of ‘regular customers’ is another valuable tactic - look for restaurants, offices or shops that want weekly flowers; or set up a co-operative promotion with local real estate agents so that a bunch of flowers is sent to every new home buyer, and so on. Once the sales level is up, attention can be paid to the proper rostering and training of people so that productivity - and profits - are maximised. Indicator Total Income Gross Profit Advertising & Promotion Interest, Bank Charges etc Rent of Premises Wages and Salaries (staff only, not owners) Vehicle Operating Costs and all Delivery Expenses Net Profit (bos)* Sales on Account Total Area per Person (square metres) Trading Hours per Week

Average $205,272 44.63% 3.22% 2.13% 8.21% 8.99% 2.43% 10.87% 19% 26 51

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, and traded for more hours per year • Had better personnel productivity • Had higher net profit margins, resulting from lower total overheads • Had owners who worked for more hours per year

34

Footwear Retailers

# 04152

Personnel productivity and stock management are two critical areas in Footwear Retail. High personnel productivity keeps a major cost - wages - under control. It also makes the fixed costs (eg insurance, rent, etc) become a smaller percentage of the higher revenue. Just as importantly, personnel productivity shows that your people are working effectively: converting enquiries into sales; on-selling related items; and up-selling the quality or number of pairs of shoes. Stock management is critical - having this year’s fashion in stock is one aspect; ensuring that the firm isn’t left with the very large and very small sizes is another. Managing the range, depth and variety of stock is an on-going battle. Keeping on top of these two areas will have the sales ticking over, and the cash flow will be available to pay operating costs. That’s a successful business! Indicator Average Gross Profit 40.44% Interest, Bank Charges, etc 2.41% Rent of Premises 5.88% Wages and Salaries (staff only, not owners) 12.06% Net Profit (bos)* 12.43% Stockturn Rate 1.93 Sales and Display Area as a Percentage of Total Area 71% Sales Floor Area (square metres) per Sales Person (including owners) 28 Trading Hours per Week 49 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher personnel productivity • Used their premises more productively • Had higher returns from funds invested in stock as well as a higher turnover of stock • Generated more revenue from each dollar of assets • Had owners who worked more hours per year

Fruit & Vegetable Retailers

# 04090

How will small business operators fare against the supermarket chains? How can they set themselves apart? Quality, freshness and service seem to be the keys. The most profitable firms earned higher margins, and had lower overhead structures. They had higher personnel productivity levels and better sales per square metre - all traditional improvements that are expected of the better businesses. But surprisingly, the high profit firms’ results were not the highest averages. So the high profit firms have aimed for better productivity but without compromising on some of the ‘service’ aspects - perhaps the carrying of groceries to customers’ cars; or creating ‘salad packs’ and ‘soup packs’ of vegetables, to meet customer needs. Focussing on these areas is therefore a ‘marketing’ strategy, and the high profit firms have achieved good financial returns as a result.

35

Indicator Average Total Income (thousands) $548.3 Gross Profit 29.45% Wages and Salaries (staff only, not owners) 4.79% Rent of Premises # 4.28% Vehicle Operating Costs 2.75% Net Profit (bos)* 10.87% Stock Turnover Rate 63 Trading Hours per Week 56 Sales Area (sq mtrs) per Sales Person and including Working Owners 46 # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were generally larger • Had higher staff costs, kept in check by higher overall personnel productivity • Had higher gross profit margins and lower non-salary overheads • Used their premises more efficiently • Had higher levels of owners’ equity relative to total assets

Furniture Retailers

# 04040

This can be a tough industry - price-competitive products, with demand subject to the vagaries of ‘fashion’. This keeps margins under continual pressure, and sometimes needs quick action to correct overstock situations. Getting the premises usage right is a key factor in financial success. Are the premises well laid-out? Can one ‘area’ be used to on-sell related pieces of furniture or furnishings? Are the sales staff available to service customers? Get these elements right, and the sales per square metre should look after itself, and in turn keep the rent under control. The picture is completed when staff are rostered so they are available at the busy times, with fewer staff available on the quiet days. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Advertising & Promotion and including Franchise/Group Fees Net Profit (bos)* Stockturn Rate Sales Area as Percentage of Total Sales Floor Area (sq mtrs) per Sales Person (including owners) Sales Per Square Metre of Sales Area Trading Hours per Week Percentage of Sales made to Account Customers # calculation excludes those firms who owned their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were much larger • Had lower non-salary costs • Generated more revenue per square metre of sales area • Had the highest personnel productivity results • Had better asset productivity and had owners who invested substantially more in the business

36

Average $1,256.2 29.85% 5.25% 4.39% 3.15% 9.50% 4.29 81% 215 $1,293 49 26%

General Practitioners

# 04060

Some observers might suggest that there is a conflict or tension between ‘good medicine’ on the one hand, and ‘good business’ on the other. In reality, the issues here are little different than other businesses face provide competent professional service; develop personal relationships to retain patients over the long-term; then business management issues come into play - cost control, improving the personnel productivity, reducing investment in the practice and so on. Larger practices have the ability to reduce their costs, but size can come at the cost of lower personnel productivity. The net result isn’t too different, once a practice reaches a critical size threshold. Indicator Total Income (thousands) Administration Fees Wages and Salaries (staff only, not owners) Rent of Premises # Vehicle Operating Costs Other Depreciation, Lease and Hire Purchase Net Profit (bps)* Support Staff per Practitioner Average Consult Length (minutes) Average # of Consults per Doctor per Week Opening Hours per Day Opening Days per Week

Average $564.5 3.46% 21.04% 5.88% 2.52% 2.62% 52.07% 1.35 15 165 9.10 5.50

# calculation excludes those firms which own their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were larger on average • Had lower overhead costs, leading to higher net profit margins • Had higher personnel productivity - in consultations and the financial results that flowed from them • Had principals who worked for more hours during the year

Giftware Retailers

# 04170

Larger Giftware Retailers seem to have some advantages over the other firms: • They have higher personnel productivity, perhaps due to a moreconsistent flow of customers, in turn keeping staff more fully-occupied • They have a better return on their stock - faster stock turnover combined with a higher gross profit margin • They also managed a better return on their premises too - revenue and gross profit per square metre were much better in the larger firms So how does the business get bigger? Think about issues like location, promotion and product range. Back it up with good performance from the sales staff, and start reaping the rewards that are available in this business. Indicator Cost Of Goods Sold Gross Profit Advertising, Promotion and including Franchise/Group Fees Interest, Bank Charges etc Rent of Premises # Wages and Salaries (staff only, not owners) Net Profit (bos)*

37

Average 59.41% 40.59% 2.51% 2.21% 9.81% 9.01% 8.62%

Stockturn Rate Trading Hours per Week Sales Area as a Percentage of Total Area Sales Area (square metres) per Sales Person including Working Owners

3.88 54 87% 45

# calculation excludes those firms which owned their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Tended to be larger • Had higher productivity per person and per square metre of sales area • Had lower non-salary overhead costs, but higher staffing expenses • Had owners who funded less of the firms’ assets • Had much better stock management • Required higher levels of assets per person.

Hairdressers

# 04018

The financial success of a Hairdressing Salon clearly depends on quality and consistency of a firm’s services, coupled with good personal relationships. So having those issues under control is imperative. Once they are working well, it’s time to concentrate on the financial drivers: • Higher personnel productivity - a consistent flow of customers through the week, to minimise idle time • A mix of personnel is important, so the qualified cutters can concentrate on higher-value work with customers • Larger size of business helps to extract cost efficiencies • Getting the best return from rent and from each chair can be boosted by trading a few extra hours per week, as long as the time is ‘busy’ to cover the extra costs Indicator Average Total Income $128,435 Gross Profit 84.42% Wages and Salaries (staff only, not owners) 27.49% Rent of Premises # 10.25% Other Occupancy 2.05% Interest and Bank Charges 2.16% Staff On Costs 2.16% Net Profit (bos) 29.61% Public Cutting Area per Hairdresser – sq mtrs (including owners & apprentices) 14 Chairs per Hairdresser (including owners & apprentices) 1.90 Trading Hours per Week 47 # calculation excludes those firms which owned their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher gross and net profit margins • Had higher personnel productivity and higher productivity per chair • Had substantially lower non-salary overheads • Used more assets per person, and funded more of those assets with owner’s equity • Traded for more hours per week

Hardware Retailers

# 04020

A key factor in this industry is having the right mix and range of stock to suit the local market’s needs. This makes the promotion and sales effort that much easier - always competitive, but relevant and focussed to the store’s customers. The key ‘financial’ areas to work on are: personnel productivity; keeping a lid on stock levels; and effective cost control. One other structural area is especially relevant in Hardware Retail: how many owners does the firm need? High profit firms have a tight ownership structure - typically only one or two owners, with more employees to handle the higher turnover. When a larger turnover is achieved with good personnel productivity and ‘few’ owners, then profits can be substantial. Indicator Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Interest, Bank Charges etc Advertising & Promotion Vehicle Operating Staff On Costs Net Profit (bos)* Stockturn Rate Days’ Debtors Total Area per Person (sq mtrs) Trading Hours per Week % of Sales made to Account Customers # calculation excludes those firms which owned their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses had: • Higher personnel productivity • A staffing mix that used relatively more employees and less owners, which concentrated the profits into fewer hands and so caused the profit per owner to rise • Higher staffing costs, which followed from the much larger average number of staff • Much higher levels of owners’ equity • Better stock management

Insurance Brokers

# 04024

One of the key factors to get right in this industry is the mix of people. The power of the principals and the employed brokers/consultants can be multiplied with the right support - people to arrange the paperwork and sometimes to get the leads too - that way, the consultants can select the right products and policies for each clients’ needs. So staff mix is important, and that drives a salary cost. Other overheads can be kept under control and economies of scale can also help to keep them low as percentages of revenue. Indicator Total Commission and Other Income Wages and Salaries (staff only, not owners) Rent of Premises # Vehicle Operating Expenses All Other Expenses

38

Average 31.53% 9.28% 3.78% 1.54% 1.68% 1.22% 1.03% 9.60% 4.27 49 126 58 49%

39

Average $230,272 16.65% 5.04% 4.95% 2.98%

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Net Profit (bps)* Support Staff per Consultant including Consultant Principals Employed Consultants per Consultant Principal Floor Area per Consultant (square metres) Floor Area per Person (square metres)

54.21% 0.54 0.45 42 27

# calculation excludes those firms who owned their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable businesses: • Were larger on average • Had lower levels of total overheads (and in particular, lower nonsalary overheads), leading to higher net profit margins • Had higher levels of productivity per person and per consultant, and also used their premises more efficiently • Had more consultants per principal • Had lower asset turnover, indicating either ‘more’ assets or lessefficient use of those assets

Jewellery Retailers

# 04122

What does it take to be one of the best jewellery retail businesses? A range of stock that suits the local market; fair but profitable pricing; having the shop open for enough hours in the week to maximise sales. These factors let the stock and premises productivity look after themselves. Now, add a little personnel productivity to really make the business hum along. This is best achieved with a mix of senior people who really know their jewellery, combined with a few more junior shop assistants, so that the overall salary level is managed properly. Of course, a dash of cost control never goes astray, either. Indicator Average Gross Profit 55.19% Wages and Salaries (staff only, not owners) 10.97% Rent of Premises # 8.20% Interest, Bank Charges, etc 2.29% Sub-contracted Repairs 2.34% Net Profit (bos)* 20.02% Stock Turnover Rate 2.17 Commissions Received and Income from Repairs as a Percentage of Total Income11% Sales Floor Area (square metres per Sales Person, including owners) 21 Trading Hours per Week 49 # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Tended to be larger • Had lower non-salary overhead costs, causing higher net profit margins • Had better personnel productivity • Used their premises more productively • Had relatively more assets, and also funded more of those assets with their own equity • Had lower returns on stock

Landscaping Contractors

# 04132

Gardens are blooming; grass and weeds are growing; outsourcing is ‘in’ for both corporate customers and busy families. Together these factors create strong demand.

42

Running this business well means watching the materials costs closely maybe customers (not the contractor!) should be encouraged to buy materials for the job? Cost control in overheads makes a difference here too, like many other sectors. The real win though, comes from maintaining high personnel productivity - have a range of people who work at the right level (eg a some skilled people, with some labourers to assist under instruction). Mixing full-timers and part-timers also ensures that the right people are available at the right time. Using some outside specialists is also a good way to provide a complete, convenient and skilled service to customers, and keep the flexibility that’s so important for the business. Indicator Materials Used Sub Contractor Costs Gross Profit Wages and Salaries (staff only, not owners) All Other Expenses Vehicle Operating Net Profit (bos*) Gross Profit per Person

Average 35.44% 5.33% 59.23% 15.80% 2.39% 7.15% 22.30% $43,323

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were generally larger • Had higher gross profit margins • Had lower non-personnel overheads • Reported higher personnel productivity, but this kept the higher staffing cost in check

Medical Specialists

# 04086

Balancing the need for proper servicing of patients against the commercial issues involved in practice management has always been a fine line in the medical profession. But it is clear that the usual business principles of productivity improvement and cost containment are as important here as anywhere else. This can be achieved by mixing the number and type of personnel in a practice, and allocating roles according to the abilities and qualifications of each person. That way, the doctors’ time is maximised to be able to deliver quality medical services. Just like other sectors, the amount of time that the principals can work will also influence the overall profits from the practice. Indicator Total Income Other Insurance Wages and Salaries (staff only, not owners) Rent of Premises # Vehicle Operating Costs Other Depreciation, Lease and Hire Purchase Net Profit (bps)* Average Consultation Length (minutes) Average # of Consultations per Doctor per Week Opening Hours per Day # calculation excludes those firms which own their own premises *(bps) before principals’ salaries and benefits

43

Average $470,994 3.43% 14.05% 3.65% 3.08% 3.57% 60.16% 29 70 7.9

To summarise, the more profitable practices: • Were larger, on average • Had lower non-salary overhead costs, leading to higher net profit margins • Had lower staff costs and higher personnel productivity • Required less assets per person • Had principals who worked more hours per year

Menswear Retailers

# 04030

Margins, stock management, personnel productivity and sales per square metre. Getting on top of these is the recipe for success in Menswear Retail. This Guide shows the key target to aim for in these important areas, but as usual, the financials are the outcome of the different decisions made about location, promotion, service levels, stock range and so on. Indicator Average Total Income (in thousands) $1,198.7 Gross Profit 39.95% Wages and Salaries (staff only, not owners) 7.38% Rent of Premises # 7.97% Interest, Bank Charges etc 2.16% Advertising & Promotion (including Group/Franchise Fees) 2.37% Net Profit (bos)* 11.86% Stock Turnover Rate 2.55 Trading Hours per Week 50 Total area as Percentage of Total Area 87% Total area (sq mtrs) per Sales Person and including Working Owners 54 # calculation excludes those firms who owned their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had higher productivity per person and per dollar of wages • Achieved better returns per square metre of total area • Had higher staffing costs, reflecting more employees in total and employees being a higher percentage of the total personnel • Had a better asset turnover rate

Metal Fabricators & Engineering Works

# 04070

In this sector, ownership of firms is normally held tightly - typically one or two owners - and growth is achieved with extra employees. This structure can deliver rapid growth in profit per owner when the business runs well. However, it does come at a cost - finer gross profit margins in the larger and more profitable firms; higher outlays on wages. This gives less scope for the firm to cope with a sudden ‘shock’. So it’s all the more important to closely monitor indicators such as costs, new jobs, and of course, personnel productivity. Accurate quoting is a key skill to develop - so too is delivering the goods within the budget! Higher premises productivity also helps to improve profit, but it can’t always be fixed quickly. So this sector calls for close management attention - if that is achieved, the financial results will flow.

Indicator Average Cost of Goods Sold including Sub Contractors 39.47% Gross Profit 60.53% Wages and Salaries (staff only, not owners) 17.79% Rent of Premises # 3.47% Depreciation, Lease and Hire Purchase 3.09% Vehicle Operating Costs 2.97% Net Profit (bos)* 21.10% Gross Profit (Income less materials & payments to independent subcontractors) per person $60,199 Days’ Stock and Work-In-Progress 63 Days’ Debtors 46 # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were much larger on average • Had the lowest non personnel overheads • Had higher personnel productivity, which kept the rate of increase in salary cost to a minimum • Had higher asset turnover, due in part to lower levels of stock and work-in-progress • Used their floor space more intensively

Motels

# 04016

One of the challenges in motels is to make sure that all the other people get paid before the owner - the landlord or the bank, the suppliers, the cost of leasing or depreciation on the equipment, and so on. Many of these costs are fixed - they just keep rolling on, even if there are no guests! For these reasons, a major focus has to be on keeping the occupancy rate up - location, promotion, repeat trade, special deals for the bus or tour companies, and special but targeted deals during the quiet months are all important in driving that revenue line ever higher. It’s necessary to spend regularly on the presentation of the premises and rooms, and to manage the ‘variable costs’ such as labour, power and so on. If the guests don’t keep the owners up late at night, then juggling these challenges certainly will! Indicator Total Income Cost of Goods Sold Advertising, Promotion & including Franchise/Group Fees In-room Supplies Other Depreciation, Lease and Hire Purchase Rent of Premises # Other Occupancy Costs Interest, Bank Charges etc Telephone & Fax Employees’ Wages & Salaries Replacements, Repairs, Maintenance, Hire of Plant & Equipment Net Profit (bos)* Daily Single Room Tariff Proportion of Income derived from Accommodation Number of Guest Rooms Average Guest Room Area (sq mtr) Occupancy Rate for Year # calculation excludes those firms who owned their own premises *(bos) before owners’ salaries and benefits

44

45

Average $551,970 9.01% 2.99% 3.59% 5.60% 22.80% 7.29% 7.69% 2.16% 15.77% 5.60% 22.83% $65.02 86% 30 29 66%

To summarise, the more profitable businesses: • Were much larger, on average • Had higher productivity per person and per guest room • Had savings in many areas of overhead costs • Achieved a very positive combination of higher daily tariffs, from a higher occupancy rates and also obtained more income from nonaccommodation sources

Motor Mechanics

# 04114

Motor mechanic businesses don’t vary much in size - even the large ones might only have five people. Naturally they are labour-intensive too, so the overall success of a firm boils down to the confidence that customers have in the quality of work; the pricing of the services so that customers perceive ‘value’; convenience of the premises to homes or offices. Once these are in place, the revenue starts to flow, the referrals happen, and the owners can start working on the personnel productivity levels and cost control. If either of these financial indicators get out of line, then profits can evaporate very quickly. Indicator Total Income Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Other Depreciation, Lease & Hire Purchase Vehicle Operating Net Profit (bos)* Days’ Stock on Hand Days’ Debtors Hourly Charge Rate – Trades Staff

Average $291,656 52.65% 11.47% 4.92% 2.17% 2.86% 21.42% 17 18 $43.70

# calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Tended to be larger • Had better personnel productivity • Had higher gross and net profit margins • Had lower non-personnel related overheads • Had relatively more assets, and so generated lower asset productivity

Newsagencies

# 04010

Are the long hours and high entry prices ‘worth it’ in this industry? Newsagencies often occupy prime locations in a main street or in a shopping centre and rely heavily on passing trade to generate their revenue. A sound product mix should let you make the maximum ‘on-sales’ once your customers stop to buy their papers or magazines. In turn, that lets you lift the overall average sale value and helps your attempt to sell some of the higher-margin lines. Apart from that, is the profit level really there to let you service and ultimately pay off the loans you might need when you first buy into the business? How much reinvestment in stock will you need, how much will you need to live, and then what’s left after tax to clear the loans? This is an important decision for you - and probably your banker - to come to grips with.

46

Indicator Average Total Income (thousands) $1,056.2 Gross Profit 30.04% Wages and Salaries (staff only, not owners) 7.38% Rent of Premises # 5.56% Interest, Bank Charges etc 2.06% Net Profit (bos)* 9.32% Stockturn Rate 7.48 Gross Profit on Retail Sales 24.04% Soft Gambling Commission as a Percentage of Total Income 7.15% Trading Hours per Week 71 Sales Area (sq mtrs) per Sales Person and including Working Owners 29 # calculation excludes those firms which own their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Achieved better gross profit margins from their retailing activity, and enhanced this result by having more soft gambling commission too • Had better personnel productivity • Had higher staffing costs, reflecting the additional people • Used their assets more effectively and so needed relatively fewer assets per person

Nursery & Landscaping Suppliers

# 04136

Several key decisions will affect the way a firm runs - owning the freehold of the premises might tie up large amounts of capital and could even restrict a firm’s capacity to expand; the decision to grow most of the plants for sale, or the option of buying-in stock for resale could affect the amount of labour needed and even the range of stock offered to the public. Decisions here should not automatically make it harder for a firm to generate above-average profits, but they will create some challenges along the way. Balancing these strategic decisions and still managing to achieve higher personnel productivity and a lower cost structure is the challenge facing retail nursery operators. The high profit firms can grow more of their own stock, yet still achieve higher personnel productivity and keep other costs under control. Indicator Total Income (thousands) Gross Profit Advertising & Promotion Rent of Premises Other Depreciation, Lease and HP Vehicle Operating costs Wages and Salaries (staff only, not owners) Net Profit (bos)* Stockturn Rate Days’ Debtors Plants Grown In-House as a Percentage of Total Sales Plants Purchased for Sale as a Percentage of Total Sales Trading Hours per Week Percentage of Sales Made to Account Customers

Average $740.3 40.30% 2.51% 1.93% 2.20% 3.43% 8.49% 13.21% 7.13 48 16% 50% 58 25%

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Had higher gross profit margins • Had higher overhead costs, driven in large part by wages costs • Had better personnel productivity

47

Office Supplies Retailers

#04174

Paperless offices? Don’t bet on it. Demand for office requirements continues to expand and customers are becoming increasingly hard to target: more home-based businesses makes the promotion and advertising of office supplies a little harder. Margin control is an issue that larger firms need to face; the larger and the more profitable firms have much better stock management. Those firms also have much lower overheads. So here is an industry where "size does matter" in helping to boost overall profit levels. Indicator Gross Profit Employees wages and salaries* Rent # Interest and Bank Charges Vehicle costs Advertising Depreciation, Lease and Hire-Purchase Stockturn Rate Turnover per person Percentage of Sales made to Account Customers

Average 31.00% 9.45% 2.88% 1.35% 1.32% 1.11% 1.28% 11.90 $188,791 73%

# calculation excludes those firms which own their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Generated more revenue and gross profit per person • Had much lower non-salary overheads, resulting in a higher average net profit margin • Had better stock management.

Painting Contractors

# 04160

For any labour-intensive industry, keeping on top of personnel productivity is a key factor in earning a profit. Whether it’s a ‘one man band’, or a firm with teams of painters, the issues are the same: • Having a regular flow of new work • Reducing any unproductive time - either in travel, or setup, or clean-up, or re-work • Charging the right rates for the tradespeople • Getting paid for the work Controlling costs also plays a part in delivering a suitable profit buying the right quantity; buying at the right price; using the paint to achieve a quality finish without over using the paint, and so on. The better firms have been able to make worthwhile savings in materials for jobs, as well as in the overheads too. Indicator Materials Used Sub Contractors Gross Profit Wages and Salaries (staff only, not owners) Vehicle Operating Costs Net Profit (bos)* Hourly Charge Rate for Trades Staff *(bos) before owners’ salaries and benefits

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Average 18.48% 1.45% 80.07% 25.12% 6.77% 36.34% $31.87

To summarise, the more profitable businesses: • Spent lower percentages of income on materials and on non-salary overheads • Had higher staffing costs but this was not a problem, due to better levels of personnel productivity • Generally worked on larger jobs • Had more employees per owner

Pest Control Contractors

# 04148

A single owner-operator, working alone, can make a reasonable living out of this industry. However the bigger returns are more likely to come when a firm has two or three employees. That scale of business helps the owner to get the best value from the vehicles (in particular) and to a lesser extent, the other equipment used in the business. A sound and effective promotional strategy is also important in this competitive industry. Once the customers have been obtained, then regular repeat visits are important - either the pest controller needs to come back, or the pests will! Of course, effective cost control in relation to both chemicals and overheads is important, to make sure the owner sees the right percentages in the net profit margin too. Indicator Average Total Income $162,594 Gross Profit 83.72% Wages, Salaries and Sub-Contractor payments (staff only, not owners) 7.42% Interest, Bank charges etc 3.19% Depreciation, Lease and Hire Purchase 3.54% Vehicle Operating 12.30% Advertising and Promotion 2.96% All Other Expenses 3.85% Net Profit (bos)* 40.07% Gross Profit per Person $59,495 Gross Profit per Completed Job $110 Days’ Debtors 14 Average Jobs Completed per Person 675 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were generally larger • Had higher personnel productivity • Had lower total overheads, leading to higher net profit margins • Had more owners’ equity – a higher percentage of a higher value of assets per person

Pharmacies

# 04050

The best pharmacies are different in several ways: • They have both the ‘dispensary’ side of the business and the overthe-counter sales working well • This shows up in better overall use of space, leading to higher returns per square metre, and relatively less area being patrolled by each staff member, so that sales aren’t missed • They trade for more hours each week • They have better personnel productivity, by rostering staff according to the customer flow • They promote the business more actively, too In addition, their ownership and staffing arrangements are a key part of their ability to earn higher profits. These factors all fall under the control of the owners, so ‘management’ pays dividends in Pharmacies!

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Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Net Profit (bps)* Stock Turnover Rate Dispensary Sales as a Percentage of Total Sales Trading Hours per Week Sales Area per Sales Assistant (sq mtrs) Dispensary Sales per Script Over The Counter Sales per square metre of Sales Area

Average $1,942.8 33.14% 11.46% 3.25% 11.12% 6.98 60% 62 28 $21.67 $5,131

# calculation excludes those firms which owned their own premises *(bps) before principals’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had better productivity per person • Had a personnel mix with much higher numbers of employees per principal • Had lower cost structures for the non-salary overhead items • Had higher productivity per square metre of sales area

Physiotherapists

# 04164

Balancing the sometimes competing demands of running a ‘practice’ versus a ‘business’ can be difficult for health professionals. There might be very good commercial reasons why seeing more patients is a good thing, but patients will soon become disgruntled if they feel they are being rushed. How many consults? How long for each one? What rate of payment will actually be achieved for each consult? This pressure makes it all the more important to see how other practices balance these demands. Each practice can then consciously plan its own response, based on its own treatment standards and the ‘typical performances’ reported by other practices. Larger firms with more employees are under even more pressure to keep staff occupied and to manage a larger wages bill. Other overheads roll on, at the same time. This Guide will show you the typical performance of other practices and help you work out ways of improving the performance of yours. Indicator Total Income Drugs/Supplies/Consumables/Lab Fees Interest, Bank Charges etc Rent of Premises Wages and Salaries (staff only, not principals) Net Profit (bps)* Percentage of Fees Rendered to Account Average Consultation Length (minutes) Average Number of Consultations per Physiotherapist per Week Opening Hours per Day Opening Days per Week

Average $253,968 3.26% 2.98% 8.87% 24.69% 45.65% 54% 31 65 9.36 5.19

*(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were larger, on average • Had better personnel productivity, which offset the impact of higher staffing costs • Generated more revenue per consultation • Spent slightly less on non-salary overheads, too

Plastering Contractors

Whether a sole tradesman runs the firm, or whether there are some employees involved, earning more revenue is a big issue. Bigger ‘top lines’ should flow through into bigger ‘bottom lines’. Achieving this might need different hourly rates, or other bases of charging. Marking-up the cost of materials a little more can help, too. It might just require the owners and staff to work more hours or charge more hours in a week. Forming solid relationships with local builders is one option to keep the workload up. Good planning and estimating is another technique to minimise unproductive time and maximise revenue.The business can be controlled with productivity and work-time targets. It will also be running well with the right cost targets for materials or overheads. This Guide will give more details about the specific targets to aim for, and the level of profits that could be expected from this business. Indicator Average Materials Used 29.61% Sub Contractors 3.71% Gross Profit 66.68% Wages and Salaries (staff only, not owners) 16.91% Vehicle Operating Costs 5.91% Net Profit (bos)* 34.20% Gross Profit per Person $47,039 Ave. Jobs Completed in Yr per person (incl. Trades Qualified Working Owners) 60 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger on average • Had higher personnel productivity • Had lower non personnel-related overheads but higher staffing expenses • Had relatively less owners’ equity in the asset base • Were slightly more susceptible to falls in business revenue

Plumbing Contractors

# 04104

Running a plumbing business requires more than just buying the right materials and joining them together properly. Owners are faced with the demands of finding enough work to keep themselves and staff busy for enough hours of the week. This is a key starting point in driving the revenue line of the business.Then there are the pricing decisions: how much to charge for labour and how much to mark-up those materials. Other overheads just crop up, and they need to be kept well under control. Keeping on top of unpaid accounts might not sound much like plumbing, but it is important, too. Large write-offs because a customer doesn’t pay means that the firm has done all that work literally for nothing! These are the management challenges facing the plumbing industry, so use the Guide as a checklist of each separate function. Indicator Materials Used Sub Contractors Gross Profit Wages and Salaries (staff only, not owners) Other Depreciation, Lease and Hire Purchase Vehicle Operating Costs Net Profit (bos)* Hourly Rates for Trades Staff Average Jobs Completed per Trades Person per Year *(bos) before owners’ salaries and benefits

50

# 04120

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Average 42.05% 3.64% 54.31% 12.13% 2.10% 5.41% 24.72% $38 418

To summarise, the more profitable businesses: • Were larger, on average • Had higher personnel productivity, reflected in several different ratios • Had lower non-salary overheads • Required more assets per person

Public Hotels

# 04022

How many people dream of running a pub? Apart from the long hours and the need to always be hospitable, there are some significant financial demands too - to lease, or buy? Is the goodwill worth it? How can the different parts of the business be improved? A pub is really several businesses within a business, so flexibility is a key attribute. Managing margins on a restaurant or bistro is vastly different to the quick turnover and merchandising issues of a bottleshop, and a world away from running a gaming venue. But the reality is that the best pubs run all the different departments well - and they integrate them effectively so that promotions for one department can be used to create flow-on benefits for other parts of the business. So not only do the capital investment, costs, personnel productivity and stock management become important - the targets are vastly different for each part of the pub! Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Other Occupancy Interest, Bank Charges etc Other Depreciation, Lease etc Repairs, Maintenance & Replacements Net Profit (bos)* Stock Turnover Rate

Average $804.4 44.46% 9.81% 8.58% 3.34% 3.09% 2.40% 2.12% 11.67% 18.79

*(bos) before owners’ salaries and benefits # based on the firms which have a rental expense

To summarise, the more profitable businesses: • Were larger, on average • Had much higher net profit margins • Had better personnel productivity • Had lower non-salary overheads • Used their premises more productively • Had owners who worked for less hours per annum

Real Estate Agencies

# 04088

The challenge in building a profitable real estate business is to mix the stability offered by strong property management, with the ‘blue sky’ offered by sales. But it’s not a case of one or the other. The issue is to have both parts of the business working well, then accepting the inevitable highs and lows in sales. So creating a sizeable and stable revenue base is important. So too is having sufficient reserves in the business, or available to it, to be able to ride out the bumps. Optimising the cost structure completes the picture, so that the principals can keep the right percentage of the revenue.

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Indicator Average Total Income (thousands) $872.4 Wages & Salaries (staff only) incl Commission and Vehicle Allowances 33.71% Rent of Premises # 3.03% Advertising and Promotion 6.38% Printing, Postage and Stationery 3.03% Telephone and Fax 2.92% Staff On Costs 3.63% All Other Expenses 3.82% Net Profit (bps)* 31.87% Properties Managed per Property Manager 163 Total Property Management Income per Property Manager $120,754 Properties Sold per Salesman, per year § 28 Average Commission Earned per Salesman § $123,688 Average Commission per Sale $5,194 Commission Margin 2.65% # calculation excludes those firms which own their own premises *(bps) before principals’ salaries and benefits § including principals

To summarise, the more profitable businesses: • Were larger, on average • Had lower total and non salary-related overheads, leading to higher net profit margins • Reported higher income per professional and per person • Had better-performing sales departments • Had better use of their business assets

Restaurants

# 04036

The hospitality sectors have a reputation for quickly burning out owners. Either the owner/chef gets tired of all the cooking and the late hours, they start eating and drinking the profits, or they concentrate too much on the ‘culinary’ and ignore the ‘commercial’! Understanding the basis of pricing meals is an essential starting point. How much mark-up on the cost of ingredients? Then you need to have the right level of support in the kitchen. That way, the owner can spend time managing the business instead of just cooking and serving. One of the tricks is to generate enough revenue - and gross profit from each seat. There’s always personnel productivity to consider too. It’s important to juggle the number of staff so that the plates appear and disappear at the right pace and the on-sales of desserts, wines, liqueurs etc happens to be the optimum. And all that assumes that the food’s good, too! Indicator Total Income Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Interest, Bank Charges, etc Other Occupancy Costs Other Depreciation, Lease and Hire Purchase Repairs & Maintenance Net Profit (bos)* Days’ Stock on Hand Dining Area (square metres) per Seat Seats per Table and Bar Staff (including Working Owners) Seat Utilisation per Session # calculation excludes those firms who owned their own premises *(bos) before owners’ salaries and benefits

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Average $442,013 59.57% 20.02% 7.59% 2.24% 4.51% 2.79% 2.60% 12.17% 22 2.03 29 49.81%

To summarise, the more profitable businesses: • Were larger • Had much lower total overhead costs • Had much higher productivity per person and per seat • Had the highest seat utilisation rate per session and more seats per square metre of dining area • Had better stock management

Road Transport Operators

# 04110

This sector finds pressure-points coming from many directions: • It’s extensively regulated, monitored and policed to maintain and enhance the skills and safety of drivers • It’s dominated by a few very large freight companies which supplement their own fleet of vehicles with extensive sub-contracting to independent operators • Competition is tight, margins are generally low, and many of the costs relatively ‘fixed’. This makes for a tough set of financial arrangements that need to be balanced carefully So the financial structure of the business is very important, as is the accuracy of pricing and quoting. Keeping the vehicles productive and reliable is just as important an issue as keeping the drivers productive and reliable. Use this Guide to navigate your way through the maze of financial and operational decisions needed to keep the business rolling along smoothly. Indicator Vehicle Related Costs Sub Contractors Wages and Salaries (staff only, not owners) Materials and Loading Fees Net Profit (bos)* Freight Carrying Vehicles Drivers (including Working Owners) per Freight Carrying Vehicle Average Kilometres Travelled per Vehicle per Week Average Distance Travelled per Hour (kms) Average Distance Travelled per Day (kms)

Average 50.91% 6.22% 12.75% 3.54% 15.62% 3.68 1.19 3,752 74 656

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had higher net profit margins • Had lower operating costs, especially concerning vehicle-related costs • Generated more revenue per person and per kilometre travelled, even though costs per kilometre remained reasonably constant • Relied slightly more on the use of sub-contractors

Rural Merchants

# 04128

Running a rural merchandise business can be like running two different businesses in one - a retail business that buys and sells a heavily seasonal product at relatively low margins; and possibly an agency business if you’re selling properties or livestock. Different issues are relevant to each part of the business: • Typical retail issues include margin control, forecasting and buying of stock for re-sale, and managing the cash flow of seasonal sales and purchases • Agency issues include personnel productivity, getting the revenue mix right between ‘commission’ and ‘retail’, and effective, welltargeted promotion

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This sector can deliver a good living if the productivity and cost issues are managed properly and if the business is well balanced. Use the Guide to help you identify the different needs of each part of your business against industry trends and typical performance. Indicator Total Income (thousands) Gross Profit Vehicle Operating Costs Wages and Salaries (staff only, not owners) Net Profit (bos)* Gross Profit per Person Stockturn Rate Days’ Debtors Commissions Received as a Percentage of Total Income Trading Hours per Week

Average $2,867.9 18.16% 1.34% 4.56% 6.35% $82,418 8.85 53 3.61% 50

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had much higher personnel productivity results • Had higher net profit margins • Had lower non-salary overhead costs

Service Stations

# 04072

Location and volume! These are the key words used in the industry as the drivers of overall business success. They’re certainly important, but there are other factors that have to be well-tuned to make the business run at the right profit level. Managing the personnel mix is one such factor. Having the right number of people to efficiently process sales transactions is an obvious starting point. Mixing full-timers and casuals to help get the right number of people is another aspect. Knowing what skills are needed at various times of the day, so you are paying a suitable hourly salary to the right type of person can make a big difference to your profitability. When are the mechanics needed? When will console operators give the right level of service? How many hours should the business trade each week? Sales mix is another key area to work on. Balancing the sales of ‘fuel’ versus ‘shop items’ will affect the overall gross profit margin. And, of course, cost control is always critical in a low-margin environment. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Net Profit (bos)* Stock Turnover Rate Trading Hours per Week Number of Hoses Fuel Sales per Hose Fuel sales as a Percentage of Total Sales # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

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Average $2,072.0 13.79% 3.91% 1.80% 4.30% 47 100 8 $198,991 74%

To summarise, the more profitable businesses: • Were larger • Had higher average gross profit margins • Had lower overheads, which complemented the higher gross profit, and caused average net profit to rise rapidly • Achieved higher productivity per person and per dollar of wages paid • Traded for more hours per week

Smash Repairers

# 04082

Maintaining or improving the firm’s personnel productivity while keeping up high standards of workmanship is critical in this sector. In many cases, the revenue available from each job is controlled by, or negotiated with, an insurance company. There might be a little more flexibility to negotiate a higher net rate with a private customer, but no matter what the source of the payment, three areas are essential to watch: 1. The ability to accurately estimate the time and materials needed to do the job properly 2. The ability to deliver high-quality work within the constraint of the quoted figure 3. The ability to control the other overheads of the business, so that you optimise costs and achieve the desired profit from each job Knowing the individual staff members’ technical strengths and weaknesses will help; so too will a well-laid-out workshop. Effective management through realistic target setting fills in the picture. Indicator Average Gross Profit (revenue less paint, parts, and specialist sub-contractors) 54.11% Employee and Internal Contractor Payments (excluding owners) 21.35% Rent of Premises 4.10% Other Depreciation, Lease &Hire Purchase, Hire of Plant & Equipment 2.15% Vehicle Operating 2.61% Net Profit (bos)* 14.15% Days’ Debtors 25 Proportion of Income derived from Insurance Companies 67% Factory Floor Area/Tradesman including Apprentices and Working Owners (sq mtrs) 107 *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Had higher average gross profit and net profit margins • Had the lowest non-salary overheads • Reported much higher productivity per person and per dollar of wages • Had higher owners’ equity relative to total assets

Sporting Goods, Toy & Outdoor Retailers # 04172 A key challenge in this sector is dealing with the ‘seasons’. Purchases need to be planned months ahead; the right mix of items needs to be stocked up; special-interest groups and clubs need to have the products promoted to them; and the left-over items at the end of the season have to be dealt with. (Do you discount them or store them until next season?) As if that’s not enough, planning the cash flows around these major sales seasons will take some care, too.

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Competition comes from the catalogues that proliferate all the time, so an independent business needs to forge strong links with local sporting and recreational clubs, as well as keep its retail prices keen, to counter this competition and build sales. Indicator Average Total Income $669,673 Gross Profit 34.42% Advertising, Promotion and including Franchise/Group Fees 2.66% Interest, Bank Charges, etc 2.37% Rent of Premises # 5.54% Wages and Salaries (staff only, not owners) 5.24% Net Profit (bos)* 11.82% Total Income per Person $195,027 Stockturn Rate 2.39 Sales Area (square metres) per Sales Person and including Working Owners 78 #calculation excluded those firms which owned their premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Had higher personnel productivity levels • Used their premises much more efficiently • Had far more employees per owner, which concentrated the profits in the hands of fewer owners • Tended to use a little more debt and a little less equity to fund the business, on average

Supermarkets

# 04134

Supermarkets represent a stable way into retailing. We’ve all got to eat, so sales should be regular and consistent. Of course, making the most of the various special times in the year helps add a bit of turnover and hopefully some extra profit too. Managing stock levels is one obvious area to work on. You need to have the right stock available, and turn it over regularly. Take advantage of deals and special buys in these mainstream products, then make special features of the related products to really get the benefits! Using floor space effectively is also a continual challenge. Managing product lines and ranges by the metre of shelf space is a key tool that the big operators use, so independent supermarkets need the same discipline, too. And, of course, people represent the third key area to work on. Continually working to maximise the revenue and gross profit per person will keep a major cost under control. Indicator Total Income (thousands) Gross Profit Interest, Bank Charges etc Rent of Premises Other Occupancy Costs Wages and Salaries (staff only, not owners) Net Profit (bos)* Gross Profit per Person Stockturn Rate Trading hours per Week Sales Area as a Percentage of Total Area

Average $2,204.2 18.41% 1.22% 1.64% 1.08% 5.76% 4.51% $51,108 13 66 81%

To summarise, the more profitable businesses: • Were larger, on average • Had higher gross and net profit margins • Had higher personnel productivity • Used their premises more efficiently • Had higher levels of owners’ equity • Had better returns from funds invested in stock • Had owners working fewer hours, on average

Take-Away Food Retailers

Success in this industry will come first and foremost from the quality of food prepared and sold. Fresh and tasty food prepared and presented in a healthy and hygienic environment is essential. But financial success comes from achieving those quality outcomes and maintaining high personnel productivity and also from using the premises effectively. In short, it means getting the right revenue from two major ‘inputs’ people and premises. Ensure that the business is open for enough hours in the day; roster people so that the right number are available to prepare, clean-up and sell the product; and have a range of complementary products to maximise on-sales from each transaction. Simple, isn’t it? This Guide will help you set your targets against the industry’s ‘typical performances’. Indicator Average Total Income $284,501 Gross Profit 43.49% Wages and Salaries (staff only, not owners) 8.69% Rent of Premises # 6.13% Interest, Bank Charges, etc 2.36% Other Occupancy Costs 3.41% Other Depreciation, Lease &Hire Purchase 2.38% Advertising, Promotion and Franchise/Group Fees 2.03% Net Profit (bos)* 12.38% Stockturn Rate 29 Trading Hours per Week 62 Sales Area as a Percentage of Total Area 80% Sales Area (sq mtrs) per Sales Person and including Working Owners 28 # calculation excludes those firms which own their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger • Reported higher gross and net profit margins • Had higher personnel productivity results, reflected in turnover and gross profit per person, and per dollar of wages • Traded for more hours per week and used their premises more intensively • Had higher levels of owners’ equity in their asset base

*(bos) before owners’ salaries and benefits

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# 04068

59

Taxi Operators

# 04032

On-road hours, kilometres, and passengers - the ‘trifecta’ for taxi operators. When all three are high, revenue will be strong and so will profits. Achieving this requires wise use of the vehicle - keeping it well maintained and mechanically ‘clean’ so it stays ‘on-road’, and has minimum ‘breakdown time’. It also stops fuel being wasted. Good driving habits need to be continually worked on - the benefit will quickly show up in lower fuel and tyre costs, for example. With the rate per kilometre set in most cases, then the operator needs to think about better productivity and lower operating costs. Indicator Average Vehicle-related Costs 35.20% Wages and Salaries (staff only, not owners) 16.00% Radio/Co-op Fees 5.61% Interest, Bank Charges, etc 4.01% Total Vehicle Costs per: Person $16,124 Taxi $28,313 Kilometre Travelled~ $0.31 Net Profit (bos)* 34.38% Fare Income per Driver (including Working Owners, Employed Drivers & Commission Drivers but excluding Sub-Lease Drivers #) $46,807 Sub-Lease # Income Received as a Percentage of Total Business Income 11% Number of Taxis 1.58 Average Kilometres Travelled per Vehicle per Week 2246 Average On-road Hours per Vehicle per Week 90 Typical Days per Week Vehicles on the Road 6.75 Proportion of Time Taxis used by Sub-Lease Drivers# 26% *(bos) before owners’ salaries and benefits ~assumes vehicles on road 50 hours per week #Sub-Lease drivers are drivers who lease the cab for a fixed hourly or shift fee Commission drivers are drivers who are essentially employees but who earn a % of their take

To summarise, the more profitable businesses had: • Higher productivity per person and per taxi and a higher fare revenue per driver • Lower staffing cost • Owners who worked for more hours per year • More assets per person, with a lower percentage of these assets funded by owners’ equity • Much more of their income from Sub-lease drivers

Tiling Contractors

# 04166

It might sound obvious, but higher labour productivity is a key factor that determines the overall profit of a tiling contractor. Whether a sole tradesman runs the firm, or whether there are some employees involved too, earning more revenue is a big issue. This might come about from a higher hourly rate (or a higher rate per square metre); it might come about by marking-up the cost of materials a little more; or maybe from being able to spend more hours productively working on jobs for your customers. But the formula is a fairly simple one. Use the Guide to set the right productivity targets. Use it to see some cost targets for key areas such as materials or vehicles. This type of information will put another perspective on the overall management of the business, especially if you’re prone to just working more hours.

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Indicator Total Income Materials Used Sub Contractors Gross Profit Wages and Salaries (staff only, not owners) Vehicle Operating Costs Other Depreciation, Lease and Hire Purchase Net Profit (bos*) Gross Profit per Person Gross Profit per Completed Job Hourly Rate – Qualified Trades Staff

Average $94,702 14.90% 3.19% 81.91% 8.40% 11.93% 2.00% 49.42% $46,185 $1,336 $28

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger on average • Had better productivity per person and tended to work on larger jobs • Had higher staffing costs but lower non-personnel related expenses • Had higher levels of owners’ equity, within a larger asset base per person • Had better asset turnover, in spite of the extra asset value per person

Travel Agencies

# 04116

Forecasters predict an increase in travel expenditure as baby boomers approach the end of their working lives. Enter the travel agent, with advice and detailed knowledge about destinations, packages, tips and tricks for the unwary traveller. Profitable travel agencies have to be more than just booking centres, as that part of the market can be subject to threats from online booking services. The travel agent, even though paid by commission, needs to manage their own time and their ‘qualifying’ of customers to avoid creating itineraries that aren’t suitable. If the travel plan is too expensive, a lot of time has gone, with no commission earned. So ‘sales skills’ are important to properly qualify the customer, and to understand what the customer wants from their travel experience. After that, the usual cost-management issues arise. In particular, the effective use of floor space in the agent’s premises is an important part of the cost management equation. Get hold of this Guide to help you spot the typical performance issues and ways of managing them for yourself. Indicator Computer-related Costs Advertising and Promotion Printing, Postage and Stationery Wages and Salaries (staff only, not owners) Rent of Premises # Telephone and Fax Net Profit (bos)* Commission Income as a Percentage of Business Written Floor Area per Person (sq mtrs) *(bos) before owners’ salaries and benefits # calculations exclude those businesses which own their premises

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Average 4.27% 4.16% 2.82% 21.67% 11.06% 4.27% 32.47% 9.69% 23

To summarise, the more profitable businesses: • Were larger • Had lower non-salary overhead costs • Had better personnel productivity • Used premises more efficiently • Had a higher commission income • Had owners who worked for more hours per year

Tyre Dealers

At the same time, cost control is essential to make sure that the practice retains as much of the profit as is reasonable. So the two key elements to monitor are: 1. Revenue relative to the number of people needed to service it 2. The cost side of the practice

# 04168

In this sector, two key management factors are largely physical. First, how effectively is the floor area used to generate revenue? Second, how well is the stock managed? This quickly boils down to issues such as: • The layout of the workshop, and the equipment used within it • Being open for the right trading hours, to maximise revenue from the available floor area • Using trading hours to cater for the commercial market (for example fleet vehicles or professional drivers such as truckies or taxis) So concentrate on margins, stock depth and range. Ensure that suppliers give prompt delivery of tyres not held in stock. These keep the ‘merchandising’ side working well. Next, think about the balance of capital equipment versus labour, to help boost the overall premises and personnel productivity. The Guide will help you to identify these issues and give you an industry benchmark to work around. Indicator Total Income (thousands) Gross Profit Rent of Premises Wages and Salaries (staff only, not owners) Net Profit (bos)* Stockturn Rate Days’ Debtors Sales on Account Trading Hours per Week

Average $867.9 30.52% 2.03% 10.34% 8.37% 11 54 62% 51

*(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Had higher personnel productivity, leading to lower staffing costs in percentage terms • Used their premises more productively • Had higher net profit margins • Required more assets per person and used higher levels of owners’ equity to fund those assets

Valuers

# 04106

A key issue for professional practices to work on is their personnel productivity. It’s important to increase the number of projects completed in a week or year, while ensuring that all proper professional and technical standards have been maintained. An effective throughput of assignments, performed at a suitable hourly rate or for a suitable fee per valuation, is therefore critical. Technology is a part of this exercise; so too is a range of training and professional development activities.

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Indicator Average Total Income (thousands) $317.1 Professional Indemnity 2.40% Wages and Salaries & any Sub-Contractor, Sub Consultant payments 23.50% Rent of Premises 4.77% Interest, Bank Charges, etc 2.15% Telephone, Fax etc 2.57% Vehicle Operating Costs 6.09% All Other Expenses 3.33% Net Profit (bps)* 43.03% Tasks per Professional ^ 515 Floor Area per Person (square metres) 25 *(bps) before principals’ salaries and benefits ^ comprised of all principals and employed professional staff

To summarise, the more profitable practices: • Were larger, on average • Performed more tasks per year • Had lower non-salary overhead costs • Had higher staff costs, but much higher personnel productivity

Veterinary Practices

# 04102

This is the sector where a ‘client’ and a ‘patient’ aren’t the same thing! Even so, many of the traditional management issues still apply • Striking a balance in the practice’s income, between ‘professional fees’ and ‘ethical drugs’, as distinct from the ‘merchandising and retailing’ of general pet-care products. A practice can profit from both areas • Watching the margins in each of these activities, and keeping a lid on the investment in stock • Controlling the usage of time, so that enough chargeable hours are billed by the veterinarians every week - uncharged travel time in particular, can be a major cost in a veterinary practice • Watching costs (of course!) • Mixing the staff and the principals - how to profit from the efforts of productive employees The Guide gives critical targets in each of these areas - and the relative importance of each one. Indicator Total Income (thousands) Salary Costs (staff only, not principals) Staff On-costs Premises Costs – Rent (actual and/or notional) Premises Costs – Outgoings Vehicle Costs – Practice Owned All Drugs and Supplies All Equipment Costs Laboratory/Pathology Costs Any Other Expenses Net Profit (bps)* Practice Income per Professional (thousands) Practice Income per Person (thousands)

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Average $900.3 23.66% 2.18% 4.68% 2.13% 1.77% 28.17% 3.21% 2.00% 2.64% 24.28% $252.1 $109.0

Days’ Debtors 59 Fees Rendered to Account 30% Percentage of Income derived from Separately Itemised Drugs and OTC Items 41% *(bps) before principals’ salaries and benefits

To summarise, the more profitable practices: • Were larger on average • Had much higher personnel productivity • Had lower total overheads and higher net profit margins • Had higher principals’ equity • Reported faster collection of accounts rendered

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Women’s Fashion & Children’s Wear Retailers # 04026 Location of the shop, the ‘right range’ of stock for the typical customer, and achieving maximum sales at regular margins (before the ‘end of season’ and ‘help we’re overstocked!’ sales have to start). These are three key areas for a fashion retailer to get right. If these aspects are working properly, then some of the other management ratios will start to look after themselves - sales per square metre; sales per person; and stock turnover. Use these indicators to measure the degree of success with the first three areas. Indicator Total Income (thousands) Gross Profit Wages and Salaries (staff only, not owners) Rent of Premises # Interest, Bank Charges etc Advertising and Promotion, including Group/Franchise Fees Other Occupancy Depreciation, Lease and Hire Purchase Net Profit (bos)* Stock Turnover Rate

Average $424.3 35.73% 5.75% 8.28% 1.84% 1.61% 1.14% 0.09% 11.64% 3.34

# calculation excludes those firms which owned their own premises *(bos) before owners’ salaries and benefits

To summarise, the more profitable businesses: • Were larger, on average • Achieved a better gross profit margin • Had lower non-salary overheads • Saved less on those overhead expenses associated with quality of service than their size would suggest. • Achieved much higher productivity per person and per square metre of floor area • Had better stock performance from the combination of relatively lower levels of stock, sold at a higher margin, and also had higher asset turnover as a result

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BUSINESS MANAGEMENT SERIES WRITING AN EFFECTIVE BUSINESS PLAN Now you can make sure your business venture will be profitable with this step-by-step guide & software package on how to create a successful business plan.

Visit our website now ebc.com.au is the address for small business. It’s the most targeted and comprehensive Australian small business site yet. Industry based information at your fingertips Access information on over 230 different researched industries and download free guide summaries instantly. Business Benchmarking Benchmark your current business (or prospective) against the rest of your industry to: compare your firm's performance, understand the key performance indicators, develop your own action plan. Huge Savings Online Enjoy HUGE Savings on Business Guides and Business Software when ordering online. Same day dispatch Australia-wide.

Business Q&A Service Answers to your business problems are only a mouse click away! Get personalised one-on-one support from EBC's team of small business experts and search the growing Q&A database. Information Resource Centre Packed with over 7,500 pages of essential business related solutions to help you in starting, growing & managing your small business. Franchising Access a wide variety of information and resources on franchising. You can even research the different franchise opportunities via the online franchise directory.

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This easy-to-follow guide will help you set your goals and achieve your objectives, and includes bonus financial software ($105 value) to help you prepare pricing strategies, accurate cashflow projections, sales forecasts, profit & loss statements, and balance sheets. There are workbook sections throughout to help you write and structure your plan. Split into 9 tabbed sections it contains over 160 pages of essential information on: • Researching your customers, competition and the industry • Developing marketing strategies • Pricing strategies, cashflow projections, and breakeven analysis • Available resources, professionals, and Govt. departments who can help you

Price: $245* Order Code: 11800 Writing An Effective Business Plan

• Plus, a sample business plan to guide you

SMART SELLING Did you know that the customer’s experience is crucial in closing the sale? Whatever enterprise you are in, you need to know how to sell yourself, your products and your services. The guide provides you with over 150 pages of essential information to help you understand the dynamics of the selling process and its impact on the product, the organisation and the customer. It shows you not only proven techniques to generate and close sales, but also the process involved in managing the selling process. The guide comes complete with bonus financial software ($105 value) to help you prepare pricing strategies, accurate cashflow projections, sales forecasts, profit & loss statements, and balance

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sheets, and provides you with expert advice on:

TAX MADE EASY

• Why having the best sales people is not everything

If you have employees, then you will definitely need this valuable resource EBC's Tax Made Easy guide. Australia's taxation system is still complex and it gets even more so when you add in PAYG, fringe benefits tax and what you are suppose to remit to the Australian Tax Office and when. Understanding your taxation obligations can help you reduce your tax liability. The aim of this guide is to provide business owners with accurate and relevant tax information that a non-tax professional can comprehend. Plus it is essential reading for any business owner who has employees. This guide outlines the major aspects of the PAYG system and the employers' obligations. It also discusses fringe benefit tax and what employers can do to reduce their liability or actions they can take so FBT is not triggered. With nearly 200 pages of taxation information and references, this plain English guide explains topics such as: • What are your obligations in the PAYG withholding system • What are the current tax rates and what you need to withhold • How bonuses and lump sum payments are taxed • What to do if a contractor fails to supply you with an ABN • How you can calculate your PAYG instalments and the three methods you can use • What is fringe benefit tax and what items are exempt from this tax • How you can minimise your FBT and what triggers FBT for certain items • Do you need to pay pay-roll tax in your state and if so, how much • How you can calculate whether you have a superannuation shortfall and if you do, how much tax you will have to pay • How to use the GST calculation sheet to calculate your GST obligations and how this relates to BAS • How the recent changes to the BAS form affects business owners • Other taxes you need to be aware of. In addition, the guide comes complete with complimentary financial software, valued at $105, which runs in conjunction with Microsoft Excel 97 or later. It is a vital tool to ensure that your business is successful and Price: $245* profitable. Order Code: 11852 This is definitely the one guide that business Tax Made Easy owners need to have to ensure they are * Prices include GST & compliant with today's tax system.

• How the selling process works Price: $245* • Simple PROVEN selling techniques that you Order Code: 11803 can use right away Smart Selling • How easy it really is to make sales!

SUCCESSFUL SALES & MARKETING Whether your business is a bookstore or beauty salon, a consulting firm or computer company, there's one thing it can’t live without - sales and marketing. Contrary to popular opinion, successful marketing doesn't require multi-million dollar advertising campaigns or high powered publicity blitzes. What it requires is a new way of looking at the World - a mind set that views every situation as an opportunity to promote your business. With so many different avenues to choose from, you need to know what will work in your business - your livelihood depends on it. Successful Sales & Marketing will breathe fresh air into your business, showing you new strategies and practical examples of how to promote and grow your business without breaking the bank. This 180 page guide covers: • researching & monitoring your customers, competition & industry • choosing the best advertising media for your business • designing your ads to get greater responses • using networking and word of mouth referrals to grow your business • promoting your business on the internet • developing a winning business image • getting the public and media interested Price: $245* in your products Order Code: 11809 • techniques and strategies for closing the sale Successful Sales & Marketing • marketing on a shoestring • developing your marketing plan. * Prices include GST & maybe subject to change. The guide includes workbook sections at the end of each chapter to guide you as well as bonus financial software ($105 value) to help you prepare pricing strategies, accurate cashflow projections, sales forecasts, profit & loss statements, and balance sheets.

maybe subject to change.

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INSURANCE & PROTECTING YOUR BUSINESS Like most business owners, you probably already have some insurance cover, but is this really sufficient for your needs? Having the right insurance could mean the difference between your business being able to bounce back from a major disaster or buckling under financial pressures. It is essential, therefore, to establish measures to protect your business from such an eventuality. The "Insurance and Protecting Your Business" guide will help you identify your risks and the policies which will provide you with costeffective, comprehensive and effective cover. Additionally, it will help you identify safety and security measures to put in place to minimise any chance of incidents interrupting your business. It will also provide tips on how to evaluate the best policy for your needs and what you can do to reduce the cost of your premiums. This guide will also help you to understand the types of risk your business faces, what risk management means and what you can do to protect your business. Comprising 11 tabbed sections, each concentrates on a particular subject identified as being essential to protecting your business, such as: • What you need to protect your business and the hidden costs of loss or damage • How to identify the risks your own business faces • How to assess and reduce the cost of your insurance premiums • How life insurance can help your business' future • What your legal insurance obligations are • What is involved in lodging an insurance claim and your rights in a dispute • What hazards are common in the workplace and what you can do to ensure the safety of your employees and customers • Practical tools to evaluate the risks to your business and the safety of your workplace. At the end of many of these chapters are work sheets and/or checklists to help you work through the relevant sections and develop appropriate strategies. Price: $245* Order Code: 11870 Insurance & Protecting Your Business

* Prices include GST & maybe subject to change.

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BUSINESS INTERNET SERIES GETTING YOUR BUSINESS ONLINE No matter how scary the Internet may seem, as a small business owner you cannot afford to ignore this important medium which is changing the way we do business forever. It's no wonder that more and more small businesses are looking at ways to take advantage of this opportunity to increase sales and profitability through ecommerce. What you need is accurate and practical advice on how your business can take advantage of what the Internet has to offer without breaking the bank.

Price: $245* Order Code: 05000 Getting your Retail Business Online

EBC's Getting Your Business Online Series is the sound and practical advice you need to enable you to take your business to the next step while at the same time, avoiding the pitfalls that so many others fall into. Each guide in this series has been specifically researched and tailored for the Australian small business owner and shows you step-by-step how to plan, setup, promote and manage your business online. Over 220 pages of practical and essential information split into 14 tabbed sections covering:

• What research and planning you should do before deciding to go online • How to register your domain name and options for hosting your Web site • The deadly design mistakes which could affect the success of your site • How to make your Web site "sticky" so customers keep coming back • How you can make money from your Web site without selling a thing.

Price: $245* Order Code: 05001 Getting your Service Business Online

The guides even include Excel-based financial software ($105 value) which will help you to develop a financial model for getting your business online.

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ACCOUNTING & BUSINESS SOFTWARE

Quicken.Easy Solutions for Australian Businesses PERSONAL FINANCE & INVESTMENT

Visit our website now ebc.com.au is the address for small business. It’s the most targeted and comprehensive Australian small business site yet. Industry based information at your fingertips Access information on over 230 different researched industries and download free guide summaries instantly. Business Benchmarking Benchmark your current business (or prospective) against the rest of your industry to: compare your firm's performance, understand the key performance indicators, develop your own action plan. Huge Savings Online Enjoy HUGE Savings on Business Guides and Business Software when ordering online. Same day dispatch Australia-wide.

Business Q & A Service Answers to your business problems are only a mouse click away! Get personalised one-on-one support from EBC's team of small business experts and search the growing Q&A database. Information Resource Centre Packed with over 7,500 pages of essential business related solutions to help you in starting, growing & managing your small business. Franchising Access a wide variety of information and resources on franchising. You can even research the different franchise opportunities via the online franchise directory.

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Quicken Personal Plus "It's time to get Personal" - Quicken Personal Plus is the easiest way ever to manage your personal finances. Developed for Australia, it's the worlds' best selling financial management software. It’s quick and easy to: • track your family income and expenditure • manage your investments & share portfolio • track your credit cards, bank accounts, loans & savings goals • Prepare tax returns in minutes • Automatically update your share portfolio • Expense, bank balance & credit limit alerts Quicken • Create saving goals & track your progress Personal Plus Price: $129.95* • Capital Gains Estimator Code: SOQKPP • Debt reduction planner $64.98 for upgrade • Cash Flow Forecast Quicken ShareAnalyser "Take control of your share investments" Quicken ShareAnalyser is a structured approach to the stockmarket that will revolutionise the way you invest. Including the right blend of software, online services and educational material, Quicken ShareAnalyser will help you develop winning investment strategies, select the right stocks and manage your portfolio to limit your losses. It Quicken contains all the necessary tools to develop and ShareAnalyser implement your own trading strategy, combined in Price: $199.95* a single, easy software package that assists you Code: SOQSA make all your investment decisions with greater ease and confidence. • Powerful charting tools • Scan the market for winning stocks! • Manage your portfolio simply and accurately • Expert tools, Quicken ShareAnalyser contains tools usually only available in top-range products. • Easy to use! Specifically designed for ease of use and seamless integration of data and functions. • Data download ready, daily data downloads integrate automatically into Quicken ShareAnalyser – no need to enter or manipulate data ever – even stock splits and name changes are updated. • Perform technical and fundamental analysis! * Prices include GST & maybe subject to change.

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FINANCIAL MANAGEMENT

PAYROLL MANAGEMENT

CashBook First Business™ For small/micro businesses with 1-3 staff • Simple accounting for start-up, SOHO or micro businesses • Part of the Quicken range of software with more than 14 million users world wide • Tracks GST inputs and outputs (except WET) • BAS reporting • Track share portfolios • Full loan calculation and tracking Quicken CashBook • Produce quotes and tax invoices Price: $199.95* • WorkFlow Manager to monitor sales, Code: SOQKCB store customer and supplier records

Quicken Payroll Premier™ For any business managing payroll • Multi-user payroll management with the ability to transfer pay, superannuation contributions, taxes and payment summaries electronically to banks, super funds and the ATO • Track employee pay details, superannuation contributions and all types of leave • Customise employee information • Manage your payroll with a comprehensive report writer • Multiple processing options to enable speedier completion

QuickBooks® Small Business For small/medium businesses with 1-10 staff • Complete financial management and accounting system for small to medium businesses. • Most used SME accounting system in the world (more than 3 million users world wide) • Intuitive design and easy to follow QuickBooks QuickBooks • BAS Reporting Price: Price:$449.95* $259.95* • Powerful reporting with "drill down" on Code: Code:SOQB SOQB all reports $224.98 for for • Track accounts payable and receivable $75 cashback upgrade • Full inventory and stock control QuickBooks Plus Small Business (with Payroll) • Manage your staff remuneration with a streamlined payroll process • Comply to the latest requirements with more payroll reporting features • Manage the GST • Write cheques and pay bills • Create invoices • Track who owes you money • Fully-integrated BAS with online lodgement • Customisable reports and graphs • Works great with Windows XP Professional

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QuickBooks PRO Professional Multi-User For growing businesses with 10-20 staff providing services or selling goods. • All the features of QuickBooks • Advanced Job Costing and Budgeting • Produces Quotes and Estimates for clients which can be converted into invoices once accepted. • 90 Customisable management/financial QuickBooks PRO QuickPayroll reports Price: Price: $1195.95* $399.95* • Multi-User Ready (including 2 user licences) Code: SOQBPRO5U Code: SOPPRO • Includes Multi-User payroll $597.98 for $120 cashback • Links to QuickPOS upgrade for upgrade

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Payroll Premier

Now you can try before you buy... you be the judge. To satisfy yourself that QuickBooks PRO, Quicken Payroll Premier and QuickPOS will make running and managing your business easier without taking up all your leisure time, you can try full versions of all these packages for up to a month for just $9.95* - no obligation. Plus when you purchase the full version you can apply for a $10 cashback on your initial investment.

Quicken Test Flight Price: $9.95* Code: SOQBTDCD

* Prices include GST & maybe subject to change.

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BUSINESS SOFTWARE BUSINESS, MARKETING & FINANCIAL PLANS - THE EASY WAY! MAUS MasterPlan Professional Software will help you prepare either a simple or more detailed Business Plan which incorporates a full Marketing Plan and analysis. Includes industry specific sample plans, full financial analysis, actual versus budgeted comparisons, a follow up program, and the 'Timesaving Guide to Business and Marketing Planning' workbook absolutely FREE! Suitable for loan applications, analysing and improving an MAUS MasterPlan Pro existing business, launching new products or Price: $218* services, or starting a new business. Code: SOMAUSMPP

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CUSTOMER RELATIONSHIP MANAGEMENT (CRM) MADE EASY! The hardest thing about implementing a CRM system is admitting that you need to better manage your customers! CRM is a process that will convert sales opportunities into dollars and enhance customer and staff relationships. In today's competitive environment, we need to react quicker than ever before to our competitors and satisfy our customers' needs. A CRM system will help you to win new customers and retain old ones. A typical business loses half of its customers in less than 5 years through poor management. When you also consider that it is between 7 and 10 times more expensive to gain a new customer than to retain an existing one, you begin to see the importance of implementing an effective CRM system to look after your number MAUS CRM Sales one asset. To ensure that MAUS CRM & Marketing Sales & Marketing meets the needs of your Price: $299* business, the software is backed by a 14 day Code: SOMAUSCRM money back guarantee.

Companies throughout the world use publicity as a cost effective means to increase sales. In fact, adequate media coverage can often be the difference between business success or failure. MAUS Publicity Manager has been specifically designed to make it easy to gain free publicity! Whether you are promoting your products or services, increasing awareness of events and achievements or simply wanting to relay information, MAUS Publicity Manager will lead you step-by-step through building a publicity campaign. MAUS Publicity Manager comes MAUS Publicity complete with a database of 5000 media contacts. Manager You can access contacts over a broad range of Price: $218* industries and media types and start distributing Code: your press releases immediately! MAUS Publicity SOMAUSPM Manager is like having a PR agency on your own computer. Start maximising YOUR media coverage today!

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Each year, businesses lose big $’s on poorly managed & failed projects. Yet research shows that failure can be easily reduced & avoided through simple, systematic project planning. MAUS Project Planner helps you succeed where many managers have failed. Plan, track & schedule tasks and projects fast and effectively. Build task lists, set priorities and deadlines, allocate resources efficiently, monitor costs and MAUS Project track performance. Whether you’re looking to Planner streamline your existing operations, finding ways Price: $499* to cut costs, or simply wanting to take the stress Code: SOMAUSPP out of managing projects and your business, MAUS Project Planner will help! The fast, effective solution to getting the job done – on schedule AND under budget!

MAUS Performance Review will help you create accurate, personalised employee reviews in minutes! Simply choose from the dozens of performance criteria such as initiative, leadership, job knowledge, and sales skills....to name just a few! Next, use the simple 1-5 grading system to rank your employees in each area. MAUS Performance Review will then transform your meaningful observations into clear, effective text. Includes expert HR MAUS Performance Review advice at every stage and a recording system Price: $299* for problems and achievements. Code: SOMAUSPR

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MAUS Job Descriptions will help you create clear, concise job descriptions in minutes! A clear job description will help your employees work smarter and become more effective in their jobs, as well as protect your organisation against potential unfair dismissal claims. Simply choose from over 3,500 builtin jobs and edit or even combine duties from different jobs. Next, use the simple question and answer approach to address physical and educational requirements, work environment, qualifications and supervisory responsibilities. MAUS Job MAUS Job Descriptions will then take your Descriptions answers and write a comprehensive job Price: $218* description that's fully customised to your Code: organisation... It's that fast. It's that easy! SOMAUSJD

* Prices include GST & maybe subject to change.

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ESTABLISH A BUSINESS PLANNING CONSULTANCY OVERNIGHT! The MAUS Consultant's Pack, advocated by 1000s of accountants and consultants, will give you the forms, tools and knowhow to establish a professional Business Planning Consultancy overnight! Includes MAUS MasterPlan Professional, the Consultant's Guide, special consultancy software, questionnaires for clients MAUS Consultant’s Pack and a training manual. The Price: $540* Consultant's Guide includes Code: SOMAUSCP information on setting up your Version Upgrade $435 consultancy service, promoting and costing your services, impressing your clients and a simple step-by-step guide on how best to conduct a typical assignment. Use the software to access over 100 pages of forms and management question checklists, a detailed proposal, sample press releases and advertisements, overheads for training, and much more. All forms can be personalised in your own name and copyrights are provided to reproduce Business Plans for your clients.

IMPROVE YOUR CASHFLOW OVERNIGHT! MAUS Debt Collector is the simple to use, affordable solution to reducing bad debts, speeding up the collection process and improving cash flow. MAUS Debt Collector is a complete do-it-yourself debt collection system. The kit includes a contact manager, professional demand letters, telephone scripts, advice on invoice and database design, training aids and much more! Simply import your outstanding debtors into the user friendly contact manager and start collecting cash today! Also includes all the legal forms and advice you need to effectively threaten legal proceedings. The collection of just one bad debt is all it will take to pay MAUS Debt Collector Price: $218* for this revolutionary new approach to Code: SOMAUSDC credit management.

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