Why Startups Should Care About Industry Benchmarks (And Where to Find Them)

As a startup founder, you might find yourself working hard with money flowing in and out, but still questioning: “Am I doing well — or just busy?”

Industry benchmarks can help answer that question by showing you what “good” looks like for businesses like yours. With this information, you can compare, adjust, and grow with more confidence.

What Are Industry Benchmarks?

Benchmarks are averages and performance norms that provide a comprehensive view of how businesses in a particular industry typically perform, offering valuable insights into operational efficiency and financial health. They might show typical profit margins, gross profit percentages, average overhead costs, or how much revenue businesses of your size tend to bring in per employee.

Benchmarks are not about copying someone else’s numbers; instead, they provide context to help you understand your business's performance. Without that context, it’s too easy to think you’re on track when you’re leaving money on the table.

A Quick Story: Discovering Issues Through Benchmarks

We once worked with a founder who was thrilled to hit six figures in revenue their first year. But when we compared their numbers to industry data, we found they were spending nearly twice the average on overhead. They weren’t just busy — they were leaking profit every month and didn’t know it until they saw where they stood.

How Benchmarks Help

Used well, benchmarks help you:

 ✅ Spot overspending or underpricing

 ✅ Set realistic, informed goals

 ✅ Have better conversations with your bookkeeper, CPA, or investors

 ✅ Measure progress as you grow

A simple example: A solo consultant making a 5% profit margin might think they’re doing fine — but if peers average 15–20% margins, that tells you there’s room to adjust your pricing or expenses.

A small café might track food and labor costs as a percentage of sales to see how they stack up to the average. A contractor might check overhead and gross profit per job.

While benchmarks are a valuable tool, it's important to remember they aren’t the whole story — they’re just one aspect of making more intelligent decisions.

Remember: A Guide, Not Gospel

Benchmarks are just that — a guide. They help you ask better questions, like, “Why am I above or below average?” Your market, size, and stage always matter. Don’t chase a number that doesn’t fit your business model.

For example, if you’re in growth mode and intentionally spending more on marketing than the average, that could be the right move — even if your expenses look high compared to peers right now. Benchmarks should help you check your thinking, not box you in.

Where to Find Industry Benchmarks

You don’t need to reinvent the wheel. Good places to look:

• Trade associations or professional groups

• Industry reports from market research firms

• IRS and SBA small business data

• Sometimes your CPA or bookkeeper can share what they see in similar businesses (without revealing any client data)

If you can’t find an exact match for your niche, don’t worry. Get as close as you can — in terms of size, location, or business model — and use it as a starting point. The goal is progress and context, not perfection.

Accurate Bookkeeping: The Foundation for Effective Benchmarking

This is where solid bookkeeping comes in. Benchmarks mean nothing if your records are incomplete, outdated, or scattered. You need reliable, organized books to see where you stand — and what to do next.

At Blackfyre Ledger Systems, we help startups keep their books clean so they can measure up realistically, plan with confidence, and close gaps they didn’t even know they had.

If you're curious about where you stand in comparison to industry benchmarks, let's explore this together.

© 2025 by Scott Denis. This work is licensed under CC BY-NC-SA 4.0.