Chances are, if you’ve started a business, you know that it requires balancing things you already know how to do, with at least as many others for which you may have more questions than answers. Intuit has introduced a tool called QuickBooks Trends aimed at answering key questions for measuring market viability for young companies.
Fortunately or unfortunately, the advent of powerful search engines has enabled entrepreneurs to act as amateur market analysts. This is one of those cases in which it’s important to remember that you get what you pay for, and data found primarily through search engines is useful only to a certain point. Rarely is it perfectly relevant, and it requires a high degree of (perhaps misplaced) trust that the data is comprehensive, current and pure. Plus, finding good information can be time consuming – and we all know that time comes at a premium when you’re starting a business.
That challenge often leaves small business owners asking questions like, “am I overspending on XX,” and “is my business bringing in a competitive amount of revenue?”
For more than 30 years, QuickBooks has helped entrepreneurs manage their business. Recently, Intuit introduced QuickBooks Trends, a source of easily accessible, reliable, targeted market data that is designed to address some of the most pressing questions for small businesses.
With QuickBooks Trends, Intuit is putting to use some of the data that’s been (anonymously) accumulated throughout years of supporting small businesses. The tool provides a specific, quantitative snapshot of averages for various industries, locations and annual incomes.
Data points include:
- Sales growth
- Ratio of cash flow
- Percent of new vs. existing customer sales
- Percent profit margin (net, gross and operating)
- Median total income over the past year
- Median total expenses over the past year
- Expenses by category (advertising, rent, insurance, etc.)
- Income by category (products, services or other)
The company hopes the metrics will assist those working in small businesses, as well as those considering launching a new endeavor.
We hope this step forward in democratizing big data for the small business owner helps you work smarter and make business decisions with greater confidence.
QuickBooks Trends is a new addition to an ongoing effort on the part of Intuit to provide metrics that assist small businesses in tracking their progress against companies of similar size and vertical market.
In 2010, the company launched its Scorecard feature, which enables QuickBooks Online users to compare performance against other businesses within the industry by tracking three key business insight ratios:
- Net Profit Margin How much money remains after paying for everything?
- Sales Growth Is demand increasing or decreasing?
- Cash Flow (Quick Ratio) Is enough money coming in to pay the bills?
QuickBooks Trends is an extremely nascent tool, and deep content is still coming online. It is worth keeping this tool on your radar, if only because it is a serious indication that Intuit is intent on addressing the challenges that small businesses have with benchmarking against peer groups.
What other tools do you use to measure your business progress against other organizations in your category, region or size classification?