{"id":703,"date":"2010-01-25T23:02:00","date_gmt":"2010-01-25T23:02:00","guid":{"rendered":"http:\/\/smallbizsurvival.com\/?p=703"},"modified":"2015-09-28T12:57:54","modified_gmt":"2015-09-28T17:57:54","slug":"retail-store-industry-benchmarks","status":"publish","type":"post","link":"https:\/\/smallbizsurvival.com\/2010\/01\/retail-store-industry-benchmarks.html","title":{"rendered":"Retail Store Industry Benchmarks"},"content":{"rendered":"<p>Another great source for business intelligence: the <a href=\"http:\/\/www.retailowner.com\/\">Retail Owners Institute<\/a> offers industry benchmark data on six key financial ratios.<\/p>\n<p><a title=\"I feel sorry for you city folks who don't have an Atwoods on Twitpic\" href=\"http:\/\/twitpic.com\/bdfsg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright\" src=\"http:\/\/twitpic.com\/show\/thumb\/bdfsg.jpg\" alt=\"I feel sorry for you city folks who don't have an Atwoods on Twitpic\" width=\"150\" height=\"150\" \/><\/a>In a section called <a href=\"http:\/\/www.retailowner.com\/Benchmarks\">Store Benchmarks<\/a>, they break down industry averages into 51 different retail lines. They give five years of data for these six financial ratios:<\/p>\n<ul>\n<li>Current Ratio<\/li>\n<li>Gross Margin Percentage<\/li>\n<li>Return on Assets Percentage<\/li>\n<li>Debt to Worth<\/li>\n<li>Pre-tax Profit Percentage<\/li>\n<li>Inventory Turnover<\/li>\n<\/ul>\n<p><b>How to use this data if you&#8217;re in retail<br \/>\n<\/b><br \/>\nFind the classification that best fits your store. Using the <a href=\"http:\/\/www.retailowner.com\/Benchmarks\/Benchmarks-Resources#CheatSheet\">Formulas Cheatsheet at the Retail Owners Institute<\/a>, figure your own store&#8217;s ratios. Compare your performance to the average. Compare your trends to the industry trends. Are you doing better, or worse than the category? You&#8217;re looking for areas where you do well, where you do poorly, and where you have a bad trend. For example, if your Current Ratio is headed down, you are less able to pay your debts. You may be in for a cash shortage. If the industry average plummeted last year, but you managed to stay even, then you did good!<\/p>\n<p>If you don&#8217;t clearly fit a single category, you may need compare a couple of categories that you&#8217;re close to.<\/p>\n<p><b>How to use this data if you&#8217;re considering a retail business<\/b><br \/>\nTake a look at the category you are considering. Here are some actual industry averages you can plug into your financial projections. If you&#8217;re planning to start a store selling custom truck accessories, look at the <a href=\"http:\/\/www.retailowner.com\/Benchmarks\/Motor-Vehicles-Parts-Dealers\/Auto-Parts-Accessories-Stores\">auto parts and accessories benchmarks<\/a>. If you have an estimate of how much you think you can sell, multiply that times the average gross margin percentage (36.5%), to get your gross profit. That&#8217;s your profit after you pay for the merchandise only. That&#8217;s all that&#8217;s left to pay salaries, utilities, advertising, and any other expenses. Take your estimated sales times the profit percentage (1.8%) to see what your potential net profit might be.<\/p>\n<p>It may help you find a retail business to avoid. Take a look at <a href=\"http:\/\/www.retailowner.com\/Benchmarks\/Motor-Vehicles-Parts-Dealers\/New-Car-Dealers\">new car dealers benchmarks<\/a>, and click the Profit tab. In 2009, the average dealer suffered a net loss of 2.9% of their sales. Look at <a href=\"http:\/\/www.retailowner.com\/Benchmarks\/Bldg-Materials-Garden-Supplies-Dealers\/Building-Materials-Dealers\">lumber and building materials dealers benchmarks<\/a>. From 2005 to 2009, the percentage shown on the Profit tab dropped from over 3% net profit down to .3%. You might not want to jump into either of these categories right now.<\/p>\n<p><b>Other sources<\/b><br \/>\nDo you have other sources for business intelligence? We&#8217;d love to hear about them, and share them with everyone.<\/p>\n<p><i>New to SmallBizSurvival.com? Take the <a href=\"https:\/\/smallbizsurvival.com\/2006\/05\/tour-of-small-biz-survival_29.html\"> Guided Tour<\/a>. Like what you see? <a href=\"https:\/\/smallbizsurvival.com\/get-updates.html\">Get our updates<\/a>. <\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Another great source for business intelligence: the Retail Owners Institute offers industry benchmark data on six key financial ratios. In a section called Store Benchmarks, they break down industry averages into 51 different retail lines. They give five years of data for these six financial ratios: Current Ratio Gross Margin Percentage Return on Assets Percentage [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":8766,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","episode_type":"","audio_file":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","date_recorded":"","explicit":"","block":"","filesize_raw":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[3,164,27,17],"tags":[49,32],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/smallbizsurvival.com\/wp-content\/uploads\/2014\/12\/Downtown-Alva-Daisy-Village-store.jpg","_links":{"self":[{"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/posts\/703"}],"collection":[{"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/comments?post=703"}],"version-history":[{"count":4,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/posts\/703\/revisions"}],"predecessor-version":[{"id":9665,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/posts\/703\/revisions\/9665"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/media\/8766"}],"wp:attachment":[{"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/media?parent=703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/categories?post=703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smallbizsurvival.com\/wp-json\/wp\/v2\/tags?post=703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}