The ATO has released updated Small Business Benchmarks. Assistant Commissioner Peter Holt said that businesses should use the benchmarks to gauge the strength of their business and keep an eye on their competition. Updated benchmark data for more than 100 industries is now available for the following categories:
Accommodation and food.
Building and construction trade services.
Education, training, recreation and support services.
Health care and personal services.
Automotive electrical services.
Machinery and equipment repair and maintenance.
Transport, postal and warehousing.
We want small businesses to stay afloat, so our benchmarks are a great way to ensure your business is viable, comparative and not at risk of venturing into rough water. The benchmarks also help us identify small businesses that may be doing the wrong thing and not properly reporting some or all of their income. Think of the benchmarks like the red and yellow flags on the beach. If you stay between the flags, you'll be less likely to attract out attention." Assistant Commissioner Mt Holt said.
However, if your business falls outside the benchmarks, don't panic. There may be plausible explanation such as:
Higher rent to turnover - your business may be located in a high rent major shopping centre and consequently pay more rent than others in the same industry.
Higher labour to turnover - a hair salon for example may only offer basic men's hair cuts rather than style cuts and therefore have a higher labour-to-turnover ratio than other hair salons.
The quickest and easiest way to work out how you compare is by using the business performance check tool in the ATO app, which does the calculations for you. The ATO app is available for download for free from the Google Play or Apple app stores.