David Stafford
Chairman, FEDA
President/CEO, Stafford-Smith
There are many ways leaders evaluate the success of their business. Cash flow, customer and employee satisfaction and sales volume are all key indicators for any company, but it all ultimately comes down to profit.
It’s for this reason that profitability analyses like the annual FEDA Benchmarking Survey can be so helpful for dealers in the foodservice equipment and supplies industry. The survey, which will launch in April, answers four questions every dealer should be asking about their business: what is the profitability gap between high-profit distributors and the rest of the pack, what is a competitive gross margin in our industry, what type of productivity should companies expect out of employees, and are payroll expenses in line with industry benchmarks?
Stafford-Smith has long participated in benchmarking surveys covering a variety of trades that touch on our business. What I’ve learned over the years is that these studies are a useful data point in evaluating ourselves and confirming the health of our business. If you know how to read the numbers right, they can tell a story and give deep insights into how the industry is operating. Looking at the data can help us determine where we’re being smart and if there is something different we should be doing.
That said, it’s essential when reviewing the data that dealers do not simply rush to mimic what their competitors are doing without thinking about how it will affect their business. For example, when we’re looking at payroll expenses in comparison to others, context is key. Even in an era where all dealers are doing at least some business with operators across the country, variables like local costs of living can have a significant impact on what makes sense for employee pay. Likewise, benchmarking surveys can reveal the shortcomings that often come with a sales volume-first approach. Understanding those kinds of differences is why it’s important to view the results in terms of how your company operates.
I also greatly appreciate the work FEDA and Benchmarking Analytics, the company conducting the survey, are doing to ensure that all respondents are anonymous in the results and that their company data is kept secure and confidential. I’m confident that our financial data will be treated with the sensitivity it deserves, which is why I’m encouraging all FEDA dealer members to participate in this year’s survey. Contributing your responses will help all of us gain a more complete and representative picture of the industry while providing your company with data it can use to make more informed decisions.
Speaking of decision makers, I’d like to remind everyone that registration has opened for the 2024 FEDA Annual Executive Leadership Conference in Colorado Springs. You’ve probably noticed that this year’s conference has a new name, intended to reinforce its status as the industry event where business owners, c-suite leaders and their teams come to discuss the industry and share ideas with their peers and vendor partners. FEDA is planning a great event that will give us even more opportunities to connect, like a dealers and manufacturers basketball showcase game, mixed in with the educational sessions that detail best practices and keep us informed about the factors influencing our industry.