Alarm installation services - fire and security - issued 2012

Industry overview

Businesses in this industry install fire alarms, smoke alarms and security systems.

These benchmarks do not apply to businesses that install alarms and security systems in motor vehicles, video surveillance systems, or the importers and manufacturers of alarm and security systems.

Performance benchmarks

These performance benchmarks are developed using information reported on income tax returns and activity statements for the 2009-10 year. Performance benchmarks are updated annually.

To review a comparison of previous years benchmarks, refer to previous year.

These benchmarks show a number of different financial ratios of business income to business expenses, to help businesses compare their performance against similar businesses in an industry.

The key benchmark ratio for this industry is cost of sales to turnover. This ratio is likely to be the most accurate predictor of business turnover. For businesses that do not report cost of sales or only report a small amount, total expenses to turnover can be used to predict turnover.

Businesses operating outside the key benchmark may be contacted by us. During an audit, if a business does not have records to support their reported income and expenses, we may use benchmarks and other information available to assess the profits of the business.

For information about calculating benchmarks, refer to Small business benchmarks.

Key benchmark ratio	Annual turnover range
	$50,000 - $150,000	$150,000 - $600,000	More than $600,000
Income tax return
Cost of sales/turnover	20% - 40%	29% - 44%	34% - 46%
Average cost of sales	30%	37%	40%
Total expenses/turnover	51% - 72%	64% - 81%	81% - 89%
Average total expenses	62%	73%	85%
Activity statement
Non-capital purchases/ total sales	36% - 60%	49% - 64%	51% - 64%

Benchmarks are published as a range representing the ratios reported by businesses grouped either side of the average. Publishing benchmarks as a range allows for variations across financial years, regions and business models.

The following benchmarks are made available as a guide for businesses to review their performance and business practices against other similar businesses.

The following expenses are not reported by every business, so one or more of these benchmarks may not apply to an individual business.

Benchmark ratio	Annual turnover range
Income tax return	$50,000 - $150,000	$150,000 - $600,000	More than $600,000
Labour/turnover	8% - 26%	14% - 27%	22% - 32%
Rent/turnover	2% - 5%	3% - 5%	2% - 3%
Motor vehicle expenses/turnover	7% - 10%	4% - 6%	2% - 3%