We recently flew on a tiny little “air van”, wedged in behind the pilot with our knees near our ears, and our heads touching the ceiling of the plane. If the size of the plane wasn’t enough to make one’s palms sweaty, the “operations manual” that was tucked between the pilot and co-pilot seats was just a little reassuring, and one had to assume that the pilot understood all the gadgets, numbers, buttons and gauges on his dashboard in the cockpit. Without them, we wouldn’t be able to take off, let alone reach our destination.
As the pilot of your business, do you understand and regularly monitor your dashboard? Do you even have a dashboard? If not, you are just a wide-eyed passenger and you might be heading for a crash landing!
Within the engine are hundreds of processes that impact the performance of the plane. A dashboard summarises this information, giving you peace of mind – at a glance – that everything is operating effectively, and helping you monitor and navigate potential hazards.
What do you need to measure, monitor and be aware of as a business owner?
Before you can begin to customise a dashboard for your business, you need to have Key Performance Indicators (KPIs) in place. Your key performance indicators are the metrics and measures that you need to monitor to ensure that performance is optimal. These differ from business to business, depending on the type of business, size, industry and goals of the business, but I have included a broad framework that you can work from to create, tweak or assess your dashboard.
- Current revenue growth – monthly, relative to last year, relative to your budget, ETC
- Cash flow projections
- Working capital
- Breakeven, profit and loss
- Debtors, age analysis
- Accounts receivable
- Revenue / expense ratio
- Cash in bank
- Number of leads generated
- Number of leads converted to customers, conversion rate
- Number of calls received
- Number of proposals accepted or rejected
- Number of customers – has this increased or decreased?
- Average profit margin
- Average purchase value
- Client retention figures, how many new vs repeat customers? Which customer contracts are coming up for renewal?
- Leads pipeline
- Marketing spend
- Average client acquisition cost
- Digital marketing statistics – followers, tweets, interactions, mentions
- Website traffic and conversions – SEO, first visits, sign ups, online sales
- Database / new newsletter sign ups
- Market share
Production and Operations
- Stock control
- Deadlines met / missed
- Complaints / returns
- Project status
- Top product / service by sales
- Top product / service by profit
If you want your business to go places, your journey needs to be carefully monitored and consciously piloted. If you don’t have your KPIs or a dashboard in place, or if your dashboard is screaming “MAYDAY MAYDAY” perhaps it’s time to talk to me.
Fasten your seat belts… it might be a turbulent ride!