You don’t have to be a financial expert to track and benchmark business metrics. In fact, you don’t even have to know the industry standards; simply benchmark your performance against—well—yourself!
If you track the same small selection of drivers month after month and hold them against your bottom line, the numbers will soon tell a story—and that story will tell you where you’re thriving and where you have room for improvement.
The Big Three: Track These Expenses
There are three line items every machine shop management team should track without fail:
- Labor
- Raw material
- Tooling
Of course, you spend money on much more over the course of any given month, but accidentally buying too many shop rags isn’t going to seriously impact your bottom line. However, labor, raw materials, and tooling are three expenses that, if unmonitored and uncontrolled, can quickly sink a shop.
According to NTMA member surveys, CNC businesses spend these average sales percentages on “the big three”:
- Labor: 40%
- Raw material: 30%
- Tooling: 5%
That’s right: three simple line items comprise 75% of an average shop’s outflow. Now, you’re ready to do your internal benchmarking. But what about benchmarking against external criteria?
That’s where NTMA comes in.
Your NTMA Membership Includes Top-Tier Benchmarking Resources
Among the many useful resources we provide to members, NTMA’s benchmarking reports may be the most powerful.
In partnership with Mackay Research Group, NTMA conducts three financial benchmarking surveys annually, all of which are 100% anonymous and confidential:
- Executive Compensation Survey (January)
- Operating Costs Survey (March)
- Wage & Fringe Benefits Survey (September)
(NTMA directly manages our Business Conditions Surveys and Reports, which are generated twice a year in July and December.)
Mackay analyzes the Executive Compensation, Operating Costs, and Wage & Fringe Benefits surveys, translating the results into layperson’s terms before delivering the comprehensive reports—they’re FREE to survey participants!
Every survey participant also receives an individual Financial Performance Report. This interactive and completely private report is delivered directly to your inbox so you can see how your financial performance compares to industry standards.
Executive Compensation Report
Salary isn’t the only factor determining job satisfaction, but it plays a big role in recruiting and retaining top talent. The Executive Compensation Report analyzes executive earnings throughout the precision tooling and machining industry so you can ensure your shop’s compensation is competitive.
Learn more about the Executive Compensation Survey
Operating Costs Report
Improve your financial health by identifying ideal financial targets for your sector and benchmarking your CNC business against the manufacturing industry’s most profitable shops. The Operating Costs Report provides a holistic financial analysis of the custom tooling and machining industry so you can effectively assess your own expenses and financial performance.
Review a sample Operating Costs Dashboard
Wage & Fringe Benefits Report
Too often, machine shop management only gives a cursory glance at the Wage & Fringe Benefits Report, but it may be the most actionable report we provide—particularly in an industry with skyrocketing workforce needs. See the high, low, and average compensation packages for more than 30 manufacturing industry jobs; you can even filter the pay ranges by region, sales total, business line, and more. Leverage this data to improve your recruiting results, guide your employee promotions, and build a budget for the coming fiscal year.
See a sample Wage & Fringe Benefits Report
Good Decisions Begin with Good Information
If we had to offer only one piece of advice on how to run a machine shop, we’d say this:
You can’t improve anything unless you measure it first.
Whether you’re running a small shop or a large business, your bottom line is impacted by the same two, three, or four line items. When you track those metrics week after week and month after month, you define your internal benchmarks and set yourself up for benchmarking against external factors, too.
Real data from real CNC businesses
NTMA’s industry reports deliver meaningful metrics contributed by real machine shop management teams throughout the US. No other organization generates the in-depth, industry-specific insights that are outlined in our reports. The data is real, and the resulting benchmarks are invaluable to every growth-focused, customer-committed shop.
Survey-takers are high performers
You may be surprised to learn that the most active participants in NTMA’s benchmarking surveys fall into the high-performing range. Successful shops use our benchmarking resources because they know this data is vital to their success. If your shop isn’t performing like you want it to, it’s time to get involved. See the numbers behind the shops you hope to emulate and transform your aspirations into real-world results.
NTMA benchmarking is for participants only
We don’t provide our benchmarking reports to businesses that don’t participate in the surveys—not even our own members. Non-participants can still purchase the reports, but as a participant, you’ll not only save money but also get the added value of the personalized Financial Performance Report—the ultimate, interactive benchmarking tool.
Start Your Benchmarking Journey with NTMA
Our benchmarking reports contain information you cannot find anywhere else. No other reports offer apples-to-apples comparisons of small to mid-sized tooling and machining companies, placing NTMA’s benchmarking reports among the most valuable assets available to our machine shop management members.
If you’re ready to launch your benchmarking journey, you’ve come to the right place.
