The term benchmarking has been heard a great deal in business circles in recent years, but it’s not some fancy new process. Benchmarking is simply the process of measuring yourself against others to identify how you can improve your performance.
Large successful organisations have been benchmarking their businesses for years to improve results.
Benchmarking is an extremely valuable process for any business. It should be part of a company’s ongoing plan for success.
There are four simple steps to benchmarking:
- Analyse your business as it is now.
- Compare it with your competitors.
- Identify strategies to improve your performance.
- Implement the strategies.
Comparing ones own business to an industry benchmark can assess your business performance. Benchmarks are obtained from results of a survey of similar business in the industry and also from first hand experience in the industry.
MDB & Co has 15 years experience in the pharmacy industry. With its large client base of both pharmacy owners and pharmacists we have up to date information and indicators.
Comparing your pharmacy to other pharmacies allows you to identify strengths and weaknesses in your business in the areas of revenue generation, operating costs and maintaining profit levels.
The following are statistics from a survey published by the Entrepreneur Business Centre.
| Indicator | Average | Low | High |
| Total Income (thousands) | $2,020.40 | $846.00 | $3,180.40 |
| Gross Profit | 33.83% | 29.89% | 37.74% |
| Wages and Salaries (staff only, not owners) | 10.52% | 6.38% | 14.15% |
| Rent of Premises # | 3.69% | 1.96% | 6.53% |
| Net Profit (bps) * | 11.70% | 5.87% | 17.66% |
| Stock Turnover Rate | 7.0 | 4.1 | 8.8 |
| Dispensary Sales as a Percentage of Total Sales | 60% | 45% | 77% |
| Trading Hours per Week | 61 | 46 | 84 |
| Sales Areas per Sales Assistant (sq metres) | 28 | 18 | 38 |
| Dispensary Sales per Script | $22.95 | $17.45 | $27.46 |
| Over the Counter Sales per square metre of Sales Area | $5,279 | $3,230 | $7,288 |
# calculation excludes those firms which owned their own premises
* (bps) before principals salaries and benefits
In this survey most pharmacies were from the eastern states of Australia. 53% were from large rural areas and the balance were city based pharmacies. 95% of these pharmacies rented their premises and 63% of these had street frontages.
Compare the above figures to your business and identify the strengths and weaknesses. Once you have done this you can improve on the weaknesses.
MDB & Co have found in the past that most business owners are so busy operating their business that they haven’t had time to step back and consider their strengths and weaknesses and how to improve them. MDB & Co can do this for you. We can identify processes you can put in place to make your business more profitable.
Our firm is a unique combination of accountants with pharmacy industry experience. MDB & Co can provide all the services you would expect from a progressive accounting firm plus our specialist services for your industry.
- Financial Management Systems, Forward operational projections and cashflows.
- Review of payroll on-costs inclusive of workcover, superannuation and payroll tax.
- Monthly or Quarterly on or off site bookkeeping services.
- People Management, HR, staffing issues and remunerations plans.
- Equity realisation.
- Wealth creation, negative gearing & superannuation.
- Compliance and taxation services.
- Finance solutions
Frank Petruzzelli
B. Bus(Acc) F.N.T.A.
MDB & Co
Accountants & Business Advisors
Level 1, 566 Elizabeth Street
Melbourne Vic 3000
Tel: (03) 9349-1488
Fax: (03) 9349-1186
Email : frankp@mdbco.com.au
Website : www.mdbco.com.au