| There are many valuable tools that can substantially | | | | a benchmark metric and look at it weekly. Other |
| alter the way you manage your business. A business | | | | metrics to monitor productivity, performance and |
| dashboard is one of the tools you can use to help you | | | | profitability, available on a weekly basis, give ownership |
| look at your business. Consisting of key metrics that | | | | and management an excellent source of information |
| you track daily or weekly on a regular basis, it can be | | | | about performance as an early warning system rather |
| one of your best "friends" in running your business. | | | | than waiting for financials. |
| Too many people rely on their checkbook balance and | | | | The business owner needs to look at his business |
| their financial statements, which are historical in nature | | | | differently to identify 5-10 key indicators of how well |
| and usually not available until weeks to months after | | | | the business is doing, indicators other than bank |
| the close of an accounting period. They will tell the | | | | balance and profitability. As the business grows, it is |
| business owner how they are doing financially but well | | | | easy to lose sight of the ability to count what counts. |
| after the fact. Reliance on financials is important but | | | | A good business dashboard is very different from |
| often too late to take needed action once a problem is | | | | financial reports. It will tell you how you are doing today, |
| identified. Also, typical financial statements are limited in | | | | not last month. The hard part of the dashboard is first |
| the areas of the business that they monitor. | | | | identifying the critical information that you need to |
| A recent example might be helpful. A small business | | | | know and then creating the system and procedures |
| owner was very pleased with his results in the current | | | | necessary to extract the information daily to populate |
| year compared to the previous year. His full time | | | | the dashboard details. Someone has to gather and |
| employees were up about 15% and his sales were up | | | | input the data daily or twice weekly for it to have any |
| about 20%. Profits were up more than double the | | | | real value. Ownership has to look at it regularly, know |
| previous year. Everything looked good. However, while | | | | what it tells and then be able to analyze problems that |
| all the obvious numbers were up, a little digging into his | | | | need attention and identify action steps to correct the |
| financials uncovered a disturbing trend. | | | | problems. |
| His margin (or earnings per employee) was going | | | | A dashboard can be created simply out of any |
| down significantly. Even with his new facility and the | | | | spreadsheet software with the metrics along the left |
| efficiencies that resulted from it, adding people to | | | | side and the numerical indicators from left to right |
| increase production cost more per dollar of earnings | | | | across the spreadsheet over time periods, usually daily |
| than expected. | | | | or twice weekly depending on needs and availability of |
| He noted that he never would have seen that trend | | | | information. This tool will provide the business owner |
| from the financials alone. It was suggested that he | | | | with information valuable enough to make the time |
| keep track of hours worked compared to earnings as | | | | spent on it extremely worthwhile. |