SEMA News - June 2010 

How Does Your Business Compare?

By Megan McKernan

  SEMA News-June 2010-Business 
  The SEMA Financial Benchmarking Program was developed in order to provide SEMA members with financial benchmarks they could use to help measure and compare their business operations with others in the industry.
   
The SEMA Financial Benchmarking Program was developed in order to provide SEMA members with financial benchmarks they could use to help measure and compare their business operations with others in the industry. Industry-specific key performance indicators are reported that can then be used by participants to improve or grow their businesses. 

The program provides business owners and managers information, such as: how their year-to-date sales compare with other specialty-equipment companies; how their shipping costs compare to those of other companies; and what other companies spend on advertising.

How the Process Works

Data is collected each month from three different market segments: manufacturers, distributors and retailers. This data is collected, anonymously, by Hedges & Company, through a SEMA Financial Benchmarking questionnaire that is e-mailed to participants. Those companies who participate receive a free copy of the SEMA Financial Benchmarking Report for their specific segment. The report includes sales tracking and sales forecast data as well as average gross margin, quick ratio, operational overhead, shipping costs, R&D, customer returns, advertising/marketing expense and inventory turns.

All information collected is kept confidential. The data is tabulated and tracked in aggregate. For those who might be familiar with the program, the questionnaire was recently redesigned to be faster and easier to complete by allowing participants to provide data based on ranges selected from a pull-down menu.

How It Benefits Companies That Participate

  SEMA News-June 2010-Business 
   Year-to-date sales comparison for manufacturers.  
   
So, you might be asking yourself, how can this program benefit my company? For starters, the reports themselves are very beneficial, providing data that you can use to compare your business to others in the specialty-equipment market.

Companies that participate in the program are the first to receive the most recent financial information. They also receive the reports at no charge. The reports become available approximately one month after they have been released to Financial Benchmarking Program participants. SEMA members who do not participate in the program can download the reports for $50 each, while non-members can download the reports for $99.95 each.

To expand on the usefulness of the program, and subsequent reports, let’s take a look at some of the data contained in the reports. Again, there are three different reports, targeted at three different market segments.

  SEMA News-June 2010-Business 
  Year-to-date sales comparison for retailers.  
   
In December 2009, 36.5% of participating manufacturers indicated that their sales were up compared to December of 2008. Conversely, 39.7% indicated sales were down. If you are a manufacturer, and you experienced a sales increase in December compared to the previous year, you did better than almost 40% of the manufacturers in the specialty-
equipment market.

Here is what regular participants in the program have said:

“Eastwood participates in SEMA Financial Benchmarking because it lets us see how the industry is doing at a glance instead of resorting to hearsay and rumor. This is a great service organized by SEMA to get real industry numbers published in a confidential manner. That’s what I look for a trade association to do for its members, help its membership—especially in these current economic conditions.
Curt Strohacker,
Owner, Eastwood Company

  SEMA News-June 2010-Business 
  Year-to-date sales comparison for distributors. In December 2009, more distributors than manufacturers and retailers reported that sales were up compared to December of 2008. A decrease in sales compared to previous years was felt more by manufacturers than by either of the other two groups.  
   
“We participate in SEMA Financial Benchmarking because it lets us confidentially compare how we’re doing vs. the rest of the industry. It doesn’t take much time to participate and it’s a great benefit offered by SEMA.”
Sheryl Melendez,
California Car Cover Company


“We use it to get a true sense of where the industry’s heading. It’s a difficult industry to get a handle on since it’s so fragmented. I think it’s a great report.”
Aron Beach,
Vice President of Finance,
Prestolite Performance 

The data presented here are just examples of what is contained in the reports each month. The more companies that participate in the program, by providing anonymous information, the better the data will be. If you are interested in participating in the program, please contact Julie Hedges at 234/380-1650 or Julie@HedgesCompany.com.  

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