“The goal is to turn data into information and information into insight,” statistician Greg Manns told the Specialty Tools & Fasteners Distributors Association.

Manns, a CPA and senior VP of Industry Insights, spoke to the 2018 STAFDA convention on improving profitability.

  • Financial information is more useful as a ratio than as absolute figures, Manns said.

“Ratios create a common platform for reviewing information and BASG decisions.”

Ratios must be compared with some standard, such as industry-wide prices, profits, cost of goods, personnel expenses, non-payroll expenses.

  • “If your margins aren’t right, you are speeding up your demise,” Manns warned.

A sales growth of 1% can increase profit 19%, Manns observed.

  • Manns quoted Kellogg School of Management marketing professor Philip Kotler: “The sales department isn’t the whole company, but the whole company better be the sales department.”
  • “You don’t sell to distributors, you sell through distributors,” Manns emphasized. “Low paid salesmen are expensive. High paid salesmen are cheap.”
  • In the current low unemployment market, “quits” are expensive, Manns cautioned. One cost is days to fill an open position.

Manns suggested consulting online: CompensationBenchmarking.com.

  • Personnel productivity ratio  
  • There can be ratio differences between “all firms vs. high profit firms,” Manns noted.
  • Deviations from industry standards “are not necessarily good or bad, but are signals,” Manns pointed out.

Data isn’t just for showing success. One key use is “to be aware of where the weaknesses lie,” Manns said.

Ultimately, date should be used to develop an action plan.  

“Look at recent year-end financial information alongside key industry-specific stats. Identify areas you could improve and develop a strategy,” Manns emphasized.  

“If you are not going to use the data, why track it?” Web: STAFDA.org