Dr. Paul Borosky, DBA, MBA
Business Plan Writer · Management Glossary
What Is Benchmarking in Business?
Is a rebooking rate of forty-five percent good or bad? On its own, nobody can say. Benchmarking answers the question by comparing your numbers to a fair standard. This guide covers what to compare, where to find reliable data, and how to turn a gap into a target, written by Dr. Paul Borosky, DBA, MBA, business plan writer.
Questions? Call or text (321) 948-9588. Dr. Paul answers personally.
Last Updated: 11/07/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is Benchmarking?
How Do Your Numbers Stack Up?
In Plain English
Comparing Yourself to the Best
Benchmarking means comparing how you do something to how the best do it, so you know where you are behind.
A number on its own does not tell you much. Next to a fair comparison, it tells you exactly where to look.
Watch: Benchmarking
Watch Dr. Paul on Benchmarks
Benchmarks… Useful Graffiti
Under two minutes on why industry benchmarks matter and how to use them in your plan. (1:50)
A Real-World Example
The Salon With a Low Rebooking Rate
The owner of a hair salon in Savannah, Georgia finds that 45 percent of her clients book their next visit before they leave. Compared with figures from a salon industry survey, she is well below the typical range.
She adds a rebooking step at checkout: the stylist suggests a date, and the front desk books it before payment. Over the next season, she closes much of the gap.
From Dr. Paul’s Fabled Forest
Louie Waffles Walks to the Next Valley
Doctor Owl was at the First Bank of the Forest, renewing the deed to his hollow, when Isabelle the Iguana reviewed Louie Waffles’ loan request at the next desk.
“Every angle has a perspective,” Isabelle said, peering over her spectacles. “Let us check one more. How does your waffle cost compare to other cafés?”
Louie’s ears drooped. He had never looked.
That afternoon, Doctor Owl and Louie walked to a busy café in the next valley. The baker there made the very same waffle for fewer coins, buying flour by the barrel instead of the sack.
Louie walked home quietly. The next week, he came back to Isabelle with a new flour order and a lower cost on every waffle.
Want more lessons like this? This story comes from Book 1 of Dr. Paul’s Fabled Forest Business School Series.
Dr. Paul’s Insight
Dr. Paul builds benchmarks into plan projections because a lender’s first question about any number tends to be: compared to what?
Put It to Work
Benchmark Comparison Template for a Salon
Fill in your own numbers, then add one real, cited source for each benchmark. The salon numbers here are illustrative.
| Metric | This salon | Benchmark (cite the source) | Where to look |
|---|---|---|---|
| Rebooking rate | 45 percent | Your source’s typical range | Salon industry association surveys |
| Retail sales as a share of revenue | 6 percent | Your source’s typical range | Trade publications, supplier reports |
| Average service ticket | $62 | Local average | Menus and price lists of nearby salons |
| Gross margin | From your books | Industry median | RMA Annual Statement Studies (often at public libraries) |
Watch Out
Pitfalls When Benchmarking
A national chain’s numbers rarely fit a two-chair salon.
What works for them may depend on things you do not see.
Check the year on every source.
Recheck at least once a year as your business and market change.
Why It Matters
Benefits of Benchmarking
- Shows where to improve first
- More realistic projections
- A stronger case for lenders
- Clearer targets for the team
In Your Business Plan
How Benchmarking Shows Up in a Business Plan
Lenders often compare your projections to industry figures on their own. Showing your benchmarks and sources first makes the numbers easier to trust.
Sample plan excerpt: Financial Plan, Assumptions
“Projected gross margin and rebooking rates are set at the low end of published industry ranges for Year 1, rising toward the industry median by Year 3 as the rebooking program matures.”
FAQ
Questions Owners Ask About Benchmarking
What are the types of benchmarking?
Where do small businesses find industry benchmarks?
How often should you benchmark?
More From the Series
Keep Building Your Business
Every book in Dr. Paul’s Fabled Forest Business School Series teaches one subject through short stories, real terms, and one-page worksheets.
Dr. Paul Borosky, DBA, MBA
Dr. Paul is a business consultant and author with 14+ years of experience and 1,000+ written business plans. He works with owner-run small businesses on plans, financial projections, and the systems that let a business run without the owner doing everything. This page is part of the glossary for Management and Leadership for Small Businesses, Book 1 of Dr. Paul’s Fabled Forest Business School Series.
This page is for general educational purposes only. It is not financial, accounting, or lending advice. Example numbers are illustrative. For decisions about your own business, consult a qualified professional.