Tapping Into Industry Data to Finance Growth

The North American Hardware and Paint Association’s (NHPA) Cost of Doing Business Study has been aiding retailers in making operational and planning decisions for several decades, thanks to the robust data points included in the study. The study presents composite income statements and balance sheets plus averages for key financial performance ratios so owners and managers can measure their own performance against industry averages and establish financial plans to improve profitability.

For Willis Qualheim, owner of Qualheim’s True Value in Shawano, Wisconsin, the Cost of Doing Business Study helps him see how his operation is performing compared to similar operations in a wide range of metrics.

“Comparing my results with other stores shows us where we are doing very well, as well as areas where we could do better,” Qualheim says. “I utilize this as a what-if scenario to see how a small change in one metric can affect the profitability of the stores.”

In addition, Qualheim says he has also found the data helpful for securing a loan, as it shows where the operation stands compared to the industry, which builds a better relationship with the lender.

“When I bought two additional stores, my lender was very impressed that I could provide them with industry statistics, which made the approval process much easier for them,” Qualheim says. “Anyone not currently participating in this study is missing a valuable benchmarking tool that can show you where you could do better and improve your bottom line.”