For the industry Benchmarks feature in LivePlan, we partner with Sageworks, because they are the leading provider of industry data in North America. Sageworks is a financial information company. Their data and applications are used by thousands of accounting firms, banks and credit unions across North America.
Sageworks owns a proprietary database of privately-held company financial statements, aggregated by industry. Each day, Sageworks collects approximately 1,000 of these financial statements from accounting firms, banks and credit unions through a cooperative agreement with their clients. They separate the financial data from any information that would identify the participating firms. Then they aggregate the data by industry according to the North American Industry Classification System (NAICS). The finished database includes more than 1,400 different industries.
NAICS codes and descriptions
Benchmark search results are based on the industry codes and descriptions established by the North American Industry Classification System (NAICS). Sageworks data is categorized according to NAICS, because it is the standard used by Federal statistical agencies (like the U.S. Census Bureau) to classify businesses for the purpose of collecting, analyzing, and publishing data about the U.S. business economy.
NAICS was developed jointly by the U.S., Canada, and Mexico to allow for a high level of comparability in business statistics among North American countries.
NAICS category titles aren't very intuitive
NAICS codes and descriptions are updated every five years. Despite these updates, many of the NAICS industry titles still contain somewhat outdated terminology. For example, if you are writing a business plan for a coffee shop, and you search for "coffee shop," NAICS will return a category called "Snack and Nonalcoholic Beverage Bars." This is the correct category for a coffee shop business, but it might not seem intuitive based on the title.
Likewise, If you search for "web design," NAICS will return a category called "Custom Computer Programming Services." It's important to read the entire description for a category so you can make an accurate selection.
We have added more current terminology as keywords for LivePlan's custom search algorithm to make it easier to locate the correct NAICS category for your business. But, if you have any difficulty finding a category that seems correct for your business, please contact us, and we'll be happy to help you.
How to use the benchmarks if you are outside of the U.S.
The industry data from our partners at Sageworks comes from U.S. companies only. While we continue to search for sources of international benchmark data, we haven't yet found any sources that contain large enough data sets to be of use to our customers.
If you are in another country, the data in the Benchmarks tab may still be useful, but you probably want to select the entire U.S., rather than a specific region, as your point of comparison to your forecast.
For more on using the Benchmarks, see these articles: