So all things aside business at the end of the day is trading a service or product for a financial reward I think we can all agree on that.
However as simple as that concept may be anyone with skin in the game will quickly inform you that the above statement is like describing a formula one race car as a vehicle that takes petrol and moves forward.
I suppose my point is, business is as simple and as complex as you wish to make it. It’s for this reason anyone in the game that is looking to grow, and grow fast knows the importance of a dashboard.
STEP 1 – What the heck is a Dashboard?
A Dashboard is a set of information that is regularly updated to give the business owner a clear understanding of what is actually going on in their business at a glance.
Consider it like the dashboard of your car. In one quick glance you can see the temperature, fuel, speed, distance, revs, and so on. Immediately identifying how things are going without having to pull over, pop the hood and get the tool box out.
So quite quickly I am sure you can see how important a dashboard is to your business. Without it you are either wasting time or driving dangerously.
STEP 2 – What do I track?
Well, what appears on your dashboard differs for everyone, especially when you consider business type, size, turnover and so on.
Some things will always be present on the Dashboard, much like speed, revs and fuel in a car. In your business you will need to know your current turnover, net and gross margins, most likely on a monthly basis.
It always amazes me how many people simply do not know where their business sits financially.
STEP 3 – Don’t track everything!
Ok, so now we know what a dashboard is and what we HAVE to track. The next thing is to know what NOT to track.
Without fail, when we start developing a dashboard the business owner will track more than they need to. This is actually not a bad thing, but in the long run it is not sustainable, it just gets too hard.
So ask yourself aside from the standard numbers you need to track in your business add a maximum of 5 other KPI’s.
The question I always ask to determine what KPI’s to track is as follows:
“If everything else remained the same but these 5 things increased would it have the greatest overall impact on my business”
So if you are a service based business client satisfaction and referral source is essential to track.
If you are a trade or construction based, client source and error rate is essential.
If you are professional services such as finance or health I would be setting targets for new JV’s each quarter.
At the end of the day everyone is different. Don’t track everything, but track something!
STEP 4 – How do I build it?
Well most software like Tradify, Clinicko, Salesforce etc will provide you with information around your performance but it will be your responsibility to collate it and report to it.
If you don’t have these programs a simple well maintained excel document or google sheet works very well for a Sole Trader.
If you have employees or managers, request ongoing performance reports from each department in a fortnightly or monthly cadence.
It’s crucial that the managers are aware of how their information is being used, and that they must report to it!
Without reporting to the information they will have no investment in it and the reporting just becomes a task.
It’s your job as the Director / owner to demonstrate the correlation between new direction and reported information.
Step 5 – Use the dashboard, no really!
Finally, too many business owners will have great information presented to them but never use it.
“Work gets in the way” and “Hmm that doesn’t feel right” are not good enough excuses.
Using and checking your dashboard is NON NEGOTIABLE.
How long do you think you can drive without checking your fuel or speed?
We always recommend checking the dashboard once a week. But not necessarily reporting on everything once a week.
For example, track sales conversion weekly, lead generation fortnightly, revenue monthly and error rate quarterly.
So at the end of the day, not a lot of businesses use a dashboard, but a lot should. And the ones who do, grow very well. For us it’s a non-negotiable for our client’s, we will not work with someone who is not prepared to use a dashboard.
With that in mind, when are you building yours again?