We previously discussed the importance of having a well thought out strategy, focusing on the right products and services to deliver that strategy, along with a marketing & sales program and efficient processes to deliver. How do you know everything is working as planned? You need the right information, at the right intervals. We’ll discuss this in more detail below.
“Knowledge is power” – Francis Bacon
Having the right information available to make important decisions is one of the keys to successful businesses. It makes the difference between deciding on something based on a hunch versus having real information that proves the problem/potential solution.
Typically information will come in different forms, such as:
- Financial Budgets
- Operations dashboards
- One-off project analysis
- Trending analysis
For each of these, the business owner or management team is looking at a summary view that simplifies the raw data down to what matters most. This will take the form of trendlines, bar charts laid out weekly or monthly showing trends or other visual forms of representing the data in a way that clearly calls out issues or anomalies.
In your business, can you answer yes to all of these questions?
- Do you have weekly or monthly dashboard reports?
- Do your reports show trending of data, so you know if you’re doing better or worse than last week/month/quarter?
- Can you see if you are on track or not by setting targets on each matric of your dashboard?
- If someone asked you to name your most profitable product/service, can you do it right away? Do you know what the margin percentage is on that product/service?
If you answered no to any of these questions, keep reading to get an idea of what you might need, or call the experts at Rise Advisors.
Metrics and Dashboards
A dashboard is simply a collection of metrics that are grouped together on 1 or 2 pages. It forms a quick snapshot of your business. Usually updated weekly, a dashboard is an excellent way to stay on top of your business and flag issues as they pop up, rather than letting them grow into something worse. Below are the common elements of a typical dashboard are highlighted below.
By definition, Key Performance Indicators are those metrics that are key to the business or area of business. If you’re developing your list of KPI’s, consider these points:
- Limit the number of KPI’s to no more than 10 on one dashboard, otherwise, it just becomes a list of metrics and you can’t tell which ones are important.
- Identify metrics that make a difference to your business. If that metric starts to slip, will it hurt your bottom line? If yes, make it a KPI.
- Ensure someone is accountable for each KPI. Accountability means someone will be monitoring it and fixing issues as they arise so their KPI doesn’t reflect badly on them.
Set targets for each KPI, so you know if you’re on track or not.
Review regularly, ideally weekly, to ensure issues are caught early and can be fixed, or to acknowledge successes and congratulate those involved!
If you’d like more information or assistance with developing your own information dashboards, give us a call at Rise Advisors. We’d be happy to speak with you about what metrics are important for your business, and how you can gather the data to make it happen. Important data and metrics can only be kept by the right technology and must be maintained. We can further help with finding the right systems and software for your business.