After several years of uncertainty in the government contracting world we have entered a time of stability. This stability and potential growth is allowing GovCons to loosen their belts and do some long overdue strategic investing and accounting. We are seeing additional investments in business development, infrastructure, training employees, maturing project management practices, and recruiting key personnel.
To invest, an accurate financial picture of the coming year is critical. The best indicator of health is the current revenue plan. It is also helpful if a longer horizon revenue plan is available so that at even 2-5 years out, sound decisions can be made with confidence. The GAUGE report provides tips for preparing a revenue plan.
The GAUGE report also provides insight into expenditures as a % of revenue. This information will give you the confidence that your expenditures are in line with other GovCons. It will also give you an indication of how much you can invest going forward to remain competitive.
Some examples of expenditure as a % of revenue that are in the report are:
For professional services firms organization labor is the main generator of your revenue. With this in mind, understanding what the industry average of direct and subcontract labor as a % of total revenue is useful. Seeing how you stack up against your peers can provide necessary insight to areas where you may need to make adjustments.
Just a quick reminder of the benefits of external benchmarking:
- Gives a perspective of the overall industry
- Provides an understanding of what others are doing to be successful
- Produces ideas for improvement
- Makes you more competitive
- Helps you win more business and grow your organization
If you'd like to see the full GAUGE Report, click here.