This tool works best when you’re not just guessing at numbers—you’re using real, credible data to set your benchmarks. Here’s how to get there:

1. Find Your Industry Benchmarks

Don’t just plug in random percentages. Benchmarks are the averages or targets for your type of business.

Ask your local SBDC (Small Business Development Center) about industry research available for your business.

You can also check trade associations, industry magazines, or franchise disclosure documents (if you’re in a franchise-heavy industry).

Look for data that shows % of revenue spent on COGS, payroll, rent, marketing, and other major expense categories.

2. Common-Size Your Financials

If you want to compare apples to apples, you need to common-size your P&L. That means converting every line item into a % of revenue.
Here’s how:

Take your most recent P&L (monthly or annual).

For each expense category, divide the dollar amount by total revenue. Revenue must be greater than zero for this comparison.

Multiply by 100 to get the percentage.

Now your numbers are in the same format as the benchmarks—and ready for side-by-side comparison in this tool.

Example:

Revenue: $500,000

Rent: $40,000

Rent % of Revenue = $40,000 ÷ $500,000 × 100 = 8%

3. Use the Tool to Build Your Action Plan

Plug in the benchmark % you found for your industry.

Enter your actual % from your common-sized P&L.

See where your expenses are above, below or at the benchmark. A difference alone does not establish overspending or underinvestment.

Then, choose a variance to investigate. Review your business model, category definitions and operating needs before changing spending.

If you don’t have industry benchmarks yet, stop here and go get them. Guessing is how businesses drift into low margins without realizing it. This tool is only as good as the data you feed it.