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A week of newsagency management benchmarks: #1 revenue to staff

Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.

Management benchmark #1: revenue to staff ratio.

First up, by revenue I mean the total value of general sales (cards, gifts, magazines stationery etc) plus your agency (such as lottery) commissions.

Based on an average gross profit performance in the based of 28% to 35%, the revenue per labour hour benchmark I suggest is $250.00.

If your gross profit is between 35% and 40% (which it should be), the revenue per labour hour benchmark is $225.00.

You could argue that rent should play a factor in the revenue per labour hour target. I could understand that. However, my goal here is to provide a blended national figure you could compare against, to enable you to look at your business against such a benchmark.

I know of businesses hitting the two figures I have quoted as well as businesses falling below. No matter where you sit, the revenue to staff benchmark ratio can be useful in rostering and managing staff as well as guiding shop floor decisions you make.

If you have a data point on which you need to improve, understanding that data point and the levers which impact it can be a tremendous help.

I certainly find using this benchmark to assess efficiency.

Note: the benchmark figures are a guide only. In reality, the revenue figure per staff hour should be higher. Also, for hours worked – include yours too.

I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.

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Management tip

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  1. Bruce G

    Wow I am nowhere near it. Maybe I am misunderstanding it. Labour hours would be whatever your pay run says number of hours whether they are juniors or seniors? plus a reasonable hours estimate for the owner.?

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  2. Mark Fletcher

    That’s correct Bruce. There can be local factors which mean your figure could be lower and it would be okay. One of the goals of these benchmarks this week is to get newsagents thinking about theirs as I am sure that will be eye opening.

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