“Compete externally and you compare. Compete internally and you improve.” -James Clear
Benchmarking against other breweries (competing externally) is a way to compare your results to the market.
For example, if the average brewery spends 3-5% of sales on marketing, and you spend only 2%, by comparison, you’re not investing enough.
If the average brewery spends 20% of sales on payroll, and you spend 27%, you are spending too much on labor.
Of course, neither of these results are conclusive or even valid. They are just ways to compare.
Benchmarking against your own past performance (competing internally) can uncover opportunities to improve.
For example, if past spending showed payroll as a percentage of sales at 32% and now it’s 27%, you may be moving in the right direction.
Using historical monthly trends, like calculating the payroll/sales ratio over 18 to 24 months, may reveal when the numbers started to improve, and help identify what you did to make it better.
In the video below, I’ll show a few examples of how to use historical trends and ratios so that you too can leverage brewery KPIs for financial success.
Do this next:
- Watch the short KPI video below and download the sample KPI Template
- Learn more about the beer business finance membership – a network of brewery owners focused on improving financial results
