A business dashboard lets you know what’s going on in your company
When you’re driving along in your car how do you know that everything is ok with the car? You look at the dashboard – speed ok, enough fuel for the journey, engine temperature in the green. At a glance you can see everything is fine and then turn your attention back to the road ahead. How do you think your business might benefit from a similar dashboard so that you could see at a glance that all was ok and then concentrate again on building profit? If you want to run a good business then developing a dashboard is a key requirement.
The first step is to think about what things you should measure in your business to monitor how you’re doing. Business dashboards vary from business to business; most of the things you check will probably be pretty standard but others may be very unique to your business. One business I worked with used to measure the number of times each week the reject bin needed to be emptied – more than twice indicated that time and materials were being wasted and people needed to square up. Let’s look at some things you might want to measure.
- Gross profit margin
- Net profit margin
- Break even point
- Cash in hand
- Number of enquiries received
- Number of contracts started/finished
- Repeat business
- Total labor costs
- Total materials cost
- Sales per employee
- Number of jobs completed on time
The list goes on but you can see that there are plenty of options.
All you need to do now is set up a spreadsheet or table – doesn’t need to be fancy – where you can record the different metrics. Depending upon what you’re measuring and the size of your business the measurements might be taken daily, weekly or monthly. If you’re running a business where there is a lot of variation in sales – such as an all day cafe – you might measure hourly so that you can see when you might want to have extra staff on duty.
Once you have your metrics and you have your spreadsheet then just make sure you record the figures accurately. It may seem a pain at first but you will soon get into the swing of things and before long you will be able to look back at a useful and informative set of figures that you can then analyze.
Ideally, you should settle on a specific set of data to record but if you’re running a fast-developing business it may be that you go through two or three iterations of business dashboard before you decide on the final output. Don’t worry about this too much; it’s better that you have the right data rather than keep recording the wrong stuff. It may meana hole in some data early on but you’ll soon be over that.
Whether you’re just starting a small business or improving an old one you will really see a benefit in running a dashboard. You will start to see patterns emerging and, as a result, will then be able to make business decisions based on the facts rather than just hunches.