Why Comparing Yourself to the Average could be Costing You Profit

Your Financial Performance – Business Benchmarking

Many business owners focus on growing sales, but few know how their business compares with others in their industry.

At Strategy360 By Collins Hume, we use Top Performer Benchmarking to compare your business against both the industry average and the top 20% of businesses in your sector.

The gap between the two often reveals practical opportunities to improve profitability, cash flow and business performance.

Why average isn't enough

Most benchmarking compares businesses against industry averages.

The problem? Average doesn't always mean successful.

Many businesses are simply getting by. Comparing yourself with the average shows where the middle of the market sits. Comparing yourself with the top 20% shows what's genuinely possible.

Hidden profit opportunities

Benchmarking isn't about producing another report; it's about uncovering opportunities.

A business may already be profitable, yet benchmarking can reveal that margins, labour costs, pricing, inventory or overheads are limiting performance.

Often, improving just one area can increase profit without increasing sales, hiring more staff or working longer hours.

The numbers that matter

High-performing businesses monitor the metrics that drive results, including:

• Gross profit margins

• Cost of goods sold

• Labour efficiency

• Operating expenses

• Cash flow

• Productivity

• Industry-specific KPIs

As the saying goes, what you can measure, you can manage.

Better decisions backed by data

Business owners regularly ask:

• Why isn't my business as profitable as it could be?

• How do the best businesses achieve stronger results?

• Which area should I improve first?

• Where will changes have the biggest impact?

Benchmarking replaces guesswork with objective financial data, helping you identify where your greatest opportunities lie.

Turning insights into action

Benchmarking identifies opportunities. The next step is taking action.

Small improvements across several areas can have a significant impact on profitability.

How Strategy360 helps

Strategy360 By Collins Hume compares your business with both the industry average and the top 20% of performers, helping you identify practical ways to improve profit, cash flow and long-term business performance.

Instead of relying on assumptions, you gain measurable insights to help prioritise the actions that will deliver the greatest return.

Still relying on instinct instead of benchmarks?

It's not too late to take action. Benchmarking gives you an objective view of how your business compares with industry leaders, helping you identify opportunities to improve profit, cash flow and business value.

The greatest insights often come from the gap between the industry average and the top performers. What levels of performance are actually achievable? What decisions are the best businesses making? What actions are they taking differently?

Take the first step towards stronger business performance with a quick recap of our recent Top Performer Benchmark program or call Nathan McGrath on 02 6686 3000.

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Adapted and expanded by Collins Hume from How Benchmarking Reveals Hidden Profit Opportunities (ESS AccountantsMinute, Issue 459, 22 June 2026)