|
NOW UPDATED FOR 2006!
The most recent benchmarking data for Painting Contractors is now available, both in print and in downloadable PDF format, with your purchase of the Painting Contractors Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Painting Contractors for the financial years up to June 30, 2004. The survey was based on 25 businesses.
For any labour-intensive industry, keeping on top of personnel productivity is a key factor in earning a profit. Whether it's a one-man-band or a firm with teams of painters, the issues are the same:
- Having a regular flow of new work
- Reducing any unproductive time - either in travel, set-up, clean-up or re-work
- Charging the right rates for the trades people
- Getting paid for the work.
Controlling costs also plays a part in delivering a suitable profit - buying the right quantity; buying at the right price; using the paint to achieve a quality finish with over-using the paint, and so on. The better firms have been able to make worthwhile savings in materials for jobs, as well as in the overheads too.
Survey Results
These are the results of a survey of painting contractors. These results should not be considered as representative of all painting contractors in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the painting contractors in our survey were from the eastern states of Australia. Queensland was the most heavily represented area, while there were no firms located in Tasmania or the Northern Territory in our sample.
Businesses from regional towns (population above 20,000) and smaller rural areas (population under 20,000) represented around 57% of the entire group. The remainder were city-based businesses.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 5th highest and 5th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
|---|
| Materials Used | 19.14% | 14.13% | 24.98% | | Sub Contractors | 1.91% | 0.00% | 1.58% | | Gross Profit | 78.95% | 74.21% | 85.45% | | Wages & Salaries (staff only, not
owners) | 22.63% | 0.00% | 43.67% | | Depreciation, Lease, Hire-Purchase | 2.03% | 0.23% | 4.43% | | Vehicle Operating Costs | 7.22% | 3.43% | 12.35% | | Net Profit (bos*) | 36.16% | 23.35% | 54.93% | | Total Income per Person | $57,173 | $42,485 | $72,751 | | Assets per Person | $11,356 | $4,081 | $21,010 |
*(bos) before
owners' salaries and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some businesses reported some larger results for such items as:
- Advertising and Promotion of up to 4.04%;
- Accounting and Legal Fees of up to 4.35%;
- All Insurance of up to 5.09%;
- All Occupancy Costs of up to 6.35%;
- Other Depreciation, Lease and Hire Purchase of up to 5.87%;
- Repairs and Maintenance of up to 5.31%; and
- All Other Expenses of up to 4.68%.
To summarise this, larger businesses had:
- Higher net profit per working owner
- Much higher staffing costs, but this was kept in check due to the rising productivity achieved in the larger firms
- Lower non-salary overhead costs and lower materials costs
- Higher revenue per job, but not necessarily higher personnel productivity
- Less capacity to withstand falls in business revenue.
The more profitable businesses:
- Spent lower percentages of income on materials and on non-salary overheads
- Had higher staffing costs but this was not a problem, due to better levels of personnel productivity
- Generally worked on larger jobs
- Had more employees per owner.
| 
