by Dr Greg Chapman
This is another in the series of posts on Small Business Best Practice Benchmarks.
While this measure is not often considered, it’s a strategically important benchmark of the strength of a business’ position in the marketplace. Value added as a percentage of sales is defined as the ratio of costs remaining after third party costs for services and materials to deliver the products that the business sells are removed as a percentage of sales. The higher this measure is, the more of the value is created and kept inhouse.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.