Benchmarking: What Really Matters and How to Use It

Most owners want a simple answer to a hard question: are we performing well or just drifting with the market? Benchmarking helps you get past gut feel. It puts your numbers in context so you can see where you are strong, where you are slipping, and what deserves attention next. The point is not to copy someone else. The point is to make better decisions with clearer information.

What Benchmarking Actually Tells You

Revenue, margins, headcount, cash cycle, and production stats tell part of the story. The value shows up when those numbers are lined up against the right peer set and the right size range. That is when patterns jump out, like:

• Revenue up but gross margin trailing peers
• SG&A a few points high for your size band
• Working capital days creeping up compared to competitors
• Labor productivity flat while the market is gaining

Different sectors care about different signals. A contractor, manufacturer, dealership, and multi-location service business do not share the same pressure points. Picking the right metrics for your model is what keeps this from becoming a generic scorecard.

Make it Useful, Not Academic

Benchmarking works when you tie it to decisions you already make:

• Pricing and margin targets for the next budget cycle
• Setting a working capital range that your team can manage to
• Headcount and capacity planning before busy season
• Investment priorities when cash is tight

Do this on a rhythm, not once. A light quarterly review will catch drift before it becomes a problem and helps you course-correct without drama.

How We Run a Benchmarking Review

Our approach is straightforward and owner-friendly.

1. Clarify the purpose
    What decisions are on deck in the next 6 to 12 months? Price, people, spend, or a potential transition.
2. Choose the right peer set
    Match on industry and size, then adjust for your operating model so we are making fair comparisons.
3. Normalize your numbers
    Clean up one-offs, seasonality, and owner adjustments so EBITDA and cash metrics reflect how the business actually runs.
4. Deliver a one-page view
    A simple dashboard that flags the gaps that matter, plus a short list of actions to move the needle.
5. Follow through
    Quick check-ins keep targets real and create accountability. If the plan includes a future valuation, estate planning, or a potential sale, we set those steps on a sensible timeline.

Where This Helps Most

• Owners considering a transition in the next 3 to 5 years and wanting to tune margins and cash before a valuation
• Families coordinating with wealth and estate advisors who need a clean, consistent financial picture
• Leadership teams that want a short list of priorities instead of a thick report

Ready to See Where You Stand

If you want clarity without the noise, our VTT team can help you pick the right benchmarks, translate the results, and turn them into a simple plan you can act on. Start with a short discovery call and we will outline what a focused review looks like for your business.

Disclaimer

This article is for general information only and is not tax, legal, or investment advice. Your situation may differ. Contact Brady Martz for guidance specific to your business.