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At Kirby's prompting, Smith also checked Petra's assets-to-liabilities ratio. It was .82 -- too low, in her view. "He had too much short-term debt," Kirby says, most of which came from having to pay down a $100,000 line of credit every year. Smith shifted the majority of his debt from the credit line to a seven-year note, reducing his line of credit to a mere $35,000. Although such a small line may mean future cash-flow troubles, Smith isn't worried: Petra bills biweekly, and its accounts receivable turn over 10 times a year. In one study that Smith looked at, the average turnover of receivables was 5 times a year.

Smith used the numbers as guides rather than as absolutes. That's an approach most research groups recommend in order to take into account the vagaries of individual businesses. "There are so many variables," says Robert Chalfin, president of the Chalfin Group. Chalfin adds that the survey process itself often skews information in favor of profitable companies. "They're happier to talk about their results," he says.

Smith has also become a lot more scrupulous in other areas, paying more attention to the company's weekly break-even point of $23,000 and charting sales in relation to it. He's learned that a big part of financial discipline is in monitoring the simple things. "Losing money for a year is a good wake-up call," he says. --Ilan Mochari

Magic Numbers

"No single ratio tells the whole story," says Robert Chalfin, president of the Chalfin Group Inc., in Metuchen, N.J. Still, that doesn't keep consultants from compiling -- and businesses from buying -- industry statistics. Where can you find the benchmarks for your industry? Here are some likely sources:

Industry groups and trade associations. Many trade groups have statistics readily available because they often do their own surveys of member companies. Most groups also have a handle on who else is tracking the industry.

Prominent corporate partners. One giant computer company conducts surveys at the regional workshops or conferences it arranges for its partners and resellers. Your big-name partner most likely has good industry information; if not, it can't hurt to attend the workshops and ask colleagues.

Regional groups. Since industry numbers -- such as salaries -- vary widely, regional statistics often paint a clearer picture. Some organizations, such as the Greater Phoenix Economic Council, keep data about such factors as wage rates.

Accounting firms. If your accounting firm works with many small private companies, chances are that it knows where to find information on your industry. One oft-cited group that provides statistics is the Risk Management Association ( www.rmahq.org), a nonprofit in Philadelphia whose numbers are used by bankers to size up the credentials of loan applicants.

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Hands on

Better the Hire You Know

Recruiting past employees provides crunch relief

By Anne Marie Borrego

The dot-com revolution may have lost a little steam, but a lot of businesses are still struggling with the digital economy's shortage of skilled labor. So more and more employers are welcoming back what are known as "boomerang" hires -- former employees who have left for other jobs (seeking dot-com fortunes, perhaps), only to return.

In 1999, $2.6-billion computer-publishing giant IDG hired 904 employees in the United States, 122 of whom were rehires. Among those returnees was Jeff Julian, senior vice-president of Internet development and publisher of IDG.net. Following the lure of the Internet, he had left his job in business development at IDG to join RemarQ Communities Inc., a San Jose, Calif., company that provides Web sites with discussion-group capabilities. "I must admit, I felt like I wanted to get in on some of that growth," Julian says. But after eight months with RemarQ, he returned to IDG to take over for his former boss, who was leaving the company. "I feel like IDG.net has as much potential as any start-up, but at the same time you get the value of a strong brand," he says.

Philip A. Nardone, president and founder of $5-million PAN Communications, in Andover, Mass., not only courts departed employees but also lays out specific guidelines for their return. "In public relations, attrition tends to be high," Nardone says. So he keeps in touch with former employees by E-mail. If an appropriate job opens up, he lets them know. Some of his rehires, like Mary-Beth Sorgi, must go through the interview process all over again.

Sorgi left her job as an account manager at PAN four years ago to work in the marketing department of a bank. Nardone lured her back by offering her a position at a more senior level. "Some of our employees come back at a higher level if they've accrued some expertise that I feel is a value-add for our clients," Nardone says.

If returnees haven't gained any significant business experience during their absence, they usually return to the same position with the same salary that they had before, assuming that position is available. PAN's boomerang employees restart their 401(k) plans at the company's next enrollment period, just like other new hires. "In many ways they're treated like new employees," Nardone says, "except they already know the ropes and can hit the ground running, as opposed to new employees who have to get oriented."

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