Industry Benchmarks: Measuring Performance
Net Income Percentage
The most important number for the individual shop owner is net income percentage. This tells the shop owner what percentage of revenue is left after all costs are covered. Among the most interesting findings from the survey is that average net income percentages increased modestly in 2011 versus 2010.
The 2010 average net income was 10.3 percent of revenues, whereas the average net income percentage in 2011 was 12.4 percent of revenues. Given the early findings on average shop revenues, it seems clear that the shops surveyed managed to improve their net income percentages through savvy management of costs.
While these findings represent some of the key metrics that print shop owners and operators need to use to manage their operations, it is important for each shop to build on these to help grow the business and improve their financial performance.
There is another set of issues, the side of the original diagram called value innovation and business development, which was also measured with this survey. Eight key enabling capabilities and certifications were chosen to measure the extent to which a company can enable the widest range of business opportunities. What the figure illustrates is how many of the total of 377 shops (229 print-for-pay and 148 in-plant operations) reported having different capabilities and certifications. Overall, what the findings suggest is that print-for-pay shops are routinely more highly invested in some of the more advanced capabilities that should enable new business. This is due to print-for-pay shops having a need for a wider range of capabilities. For example, many in-plant print shops have no need to allow retail style, online ordering, whereas many print-for-pay shops may want to invest in this capability even if it is seldom used.
From a benchmarking perspective, any company can compare its own shop with the reported penetration and adoption of these technologies and certifications to see where it stands in terms of value innovation and business development. The use of metrics to help manage a business can and should extend beyond financial metrics into the marketplace where print shop managers can develop an understanding of the competitive environment and the need to invest in key enabling technologies. PI
Tim Greene is a Research Director within IDC's Hardcopy Solutions group. Greene is responsible for coverage of the large format printing, 3D printing, and digital signage markets.