In this article
- What is Industry Data?
- Where does the Industry Data come from?
- Industry Data Benchmarks metrics
- How is LivePlan's Industry Data different from market research?
- Citing the Industry Data in your Plan
- Industry Data FAQs
What is Industry Data?
LivePlan's Industry Data provides a suite of tools and reports that allow planners to compare their forecast assumptions and business performance with industry averages for their sector. By utilizing industry reports from Vertical IQ, LivePlan's Industry Data offers an accurate assessment of where your business stands within your sector's competitive landscape. This empowers confident decision-making as you build and revise your business plan.
This feature is available to LivePlan Premium users. To learn more about LivePlan Premium, please click here.
Where does the Industry Data come from?
The Benchmarks page of LivePlan's Industry Data offers averaged financial data collected from U.S. companies across a wide range of industries.
When creating your company or adjusting your company type, LivePlan’s AI Assistant will automatically generate the industry code most closely aligned with your business’ industry. You can also manually search for your industry within the U.S. The benchmarks will then display metrics showing how companies similar to yours have performed in the past.
These metrics can help you compare your own forecast against the actual performance of similar companies. Industry benchmarks can tell you whether you are matching the profit margins of your peers, keeping too much inventory on hand, or getting paid faster or slower than others.
Note: LivePlan's Industry Data is U.S. data. We continue to search for international sources of Industry Data, but as of yet have not found any with large enough data sets to be helpful for our customers.
Industry Data Benchmarks metrics
After you've searched for your industry, you'll see benchmark data for key profit, cash metrics, as well as quick and current ratios. This article offers a detailed description of each metric available, and you can also find this information within the Industry Data section. Just click on any metric for details:
Profit metrics
Profit metrics tell you how your margins compare to the rest of your industry. See how you stack up at three key points:
- After you pay your direct costs (gross margin)
- After you pay the rest of your regular expenses (operating margin)
- Your true bottom line (net profit margin)
| Profit metric | How it's calculated |
| Gross margin | This metric subtracts your direct costs from your revenue to determine your gross margin (sometimes called “gross income”) and then divides the result by your revenue to produce a percentage. |
| Operating margin | This metric subtracts all of your operating expenses (direct costs, payroll, rent, advertising, and so on) from your revenue to determine your operating income and then divides the result by your revenue to produce a percentage. Note: If you manually enter your expenses in the Dashboard using the "Enter overall expenses" option, LivePlan will treat the value you enter there as your total operating expenses when it calculates operating margin. If you want to separate out taxes, interest, etc., from your operating expenses, be sure to use the "Enter individual expenses" option instead. |
| Net profit margin | This metric subtracts your total expenses from your revenue to determine your net profit (also known as “net income”) and then divides the result by your revenue to produce a percentage. (More Details) |
Cash metrics
Startups and small businesses must manage their cash carefully. Even a profitable company can run out of money if it pays its bills too quickly and collects from its customers too slowly. The cash metrics show you how well you are protecting your cash position:
| Cash metric | How it's calculated |
| Average days to get paid | This metric divides your average accounts receivable balance (that is, the amount that your customers still owe you for past purchases) by your revenue in the selected period. The result is then multiplied by the length of the selected period to translate it into the equivalent number of days. |
| Average days to pay | This metric divides your average accounts payable balance (that is, the amount that you owe to your suppliers for purchases on credit) by your direct costs in the selected period. The result is then multiplied by the length of the selected period to translate it into days. |
| Inventory on hand | This metric divides the average value of your inventory by your direct costs for the selected period, then multiplies the result by the length of the selected period to translate that into days. |
If the cash metrics aren't shown in your results, here are some tips for seeing them:
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Enter values for the average days to get paid (Accounts Receivable or AR) and average days to pay (Accounts Payable or AP) in the Cash Flow Assumptions section of the forecast.
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To see the Inventory on hand metric, enable inventory handling in the Cash Flow Assumptions section of the forecast.
Spending metrics
Note: The spending metrics will be hidden if you have chosen "Enter overall expenses only" when you manually entered your actuals in the Dashboard.
| Spending metric | How it's calculated |
| Revenue spent on rent | This metric takes the expense(s) you designated as rent in the forecast, divides that total by your revenue, and expresses it as a percentage. |
| Revenue spent on payroll | This metric takes the total of salaries & wages plus employee-related expenses, divides that total by revenue, and expresses it as a percentage. |
| Revenue spent on marketing | This metric takes the expense(s) you specified as marketing in the forecast, divides that total by revenue, and then expresses it as a percentage. |
Other Metrics
Note: The Quick ratio isn’t shown if inventory isn’t enabled in the Cash Flow Assumptions area of the forecast.
| Other metric | How it's calculated |
| Quick ratio | This metric takes current assets and subtracts inventory from it, and then divides that total by current liabilities. |
| Current ratio | This metric takes current assets and divides them by current liabilities. |
What to do if no data is shown for a metric?
There are a couple of reasons you may not see data for a particular metric in the Industry Data Benchmarks page. If you have started your forecast and/or entered your actuals into the Dashboard, and you see the phrase "No Data," it could be because you haven't entered data yet for the month you have selected in the Benchmarks display. Click the date menu in the upper right corner to change the display date:
How is Industry Data different than market research?
The Industry Data section of your LivePlan Premium account provides useful insights into how your forecast and past financial performance compares with the average performance of similar-size companies in your industry. As a whole, these reports and metrics help you make sure that your business plan is realistic. While the Industry Data in LivePlan is extremely useful and can be used as industry research, it isn't meant to function as standalone market research. Here are some reasons why:
Company data vs. customer data
Our Industry Data comes from our partner company Vertical IQ. They compile financial data for a wide spectrum of businesses, remove any identifying information, and then aggregate that data.
LivePlan's Industry Data will give you a window into similar companies to yours while providing an overview of the risks, current conditions, trends, and news relevant to your business plan. Market research, on the other hand, helps you learn about your customers. The more you can learn about who your business serves and what problems your product or service solves for those customers, the stronger your business plan can be.
Getting specific about your market
The Industry Data is categorized according to the North American Industry Classification System (NAICS), which is a standardized system used by U.S. federal statistical agencies. This standardization is helpful for organizing a massive amount of data, but the classifications can be quite general, and in the case of a business operating in a niche market, there may not be enough data available to register in the Industry Data at all.
This is where market research makes a big difference - it helps you understand crucial details like how many potential customers there are for your business and what their locations and needs are in a way that the Benchmarks data can't provide.
Market research helps you write your plan
If you've looked at the questions presented in both the Pitch and the Plan section of LivePlan, you may notice that many of them relate specifically to these same subjects: who your customers are, where they are, what they need, and how you'll provide it. This is why doing your own market research is so important - the data you discover is the foundation of your business plan.
Citing the Industry Data in your Plan
To cite the information found in the Industry Data sections, you can follow a standard citation format that includes the source of the data (VerticalIQ) and the specific section within LivePlan. Here are some general guidelines on how to format these citations:
- For use at the end of a quote taken from the Industry Data; (LivePlan Industry Data, [Section Name], VerticalIQ, 2024)
- Citing the source while paraphrasing the information; "According to the Industry Data [Section Name] section in LivePlan, [insert specific data or insight] (VerticalIQ, 2024)."
These formats ensure that you clearly state where the information is sourced from, providing proper credit to VerticalIQ and specifying the section of LivePlan where the data was found.
Here’s an example of this kind of citation: "The industry is expected to grow by 5% annually (LivePlan Industry Data, Industry Outlook, VerticalIQ, 2024)."
Industry Data FAQs
LivePlan is the only business planning software with available world-class industry benchmark data provided by Vertical IQ. This gives you the power to compare your key business metrics to other similar companies across the United States.
Vertical IQ owns a proprietary database of privately held company financial statements aggregated by industry. Vertical IQ collects from accounting firms, banks, and credit unions through a cooperative agreement with its clients. It separates the financial data from any information identifying the participating firms. Then, it aggregates the data by industry according to the North American Industry Classification System (NAICS).
NAICS codes and descriptions
Industry Data search results are based on the industry codes and descriptions established by the North American Industry Classification System (NAICS). Vertical IQ 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 to collect, analyze, and publish 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 always intuitive
NAICS codes and descriptions are updated every five years. Despite these updates, many 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 full 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 right for your business, please , and we'll be happy to help you.
How to use the Industry Data if you are outside of the U.S.
The industry data from our partners at Vertical IQ comes from U.S. companies only. More than 30% of our customers are outside the U.S., and we have users in most countries worldwide. It would be great to offer everyone local Industry data. While we continue to search for sources of international benchmark data, we haven't yet found any data sets with enough scope to be as helpful to our global customers as they are to our U.S. customers.
That being said, if you are in a country outside the U.S., these benchmarks may still be helpful in giving you a real-world sense of what metrics different types of businesses can expect. For more information on LivePlan's global compatibility please see Can I use LivePlan outside the U.S.?
Learn more about our Industry Data below
Using LivePlan’s Industry Data