Do you drive your business without a Dashboard?
A couple of years ago, I was hugely fortunate to undertake the unique experience of sitting in a plane’s cockpit, where the pilot very kindly walked me through the intricacies of flying.
Navigating through the very few clouds on a sunny Surrey Sunday, he pointed out the vast array of instruments, each providing critical data.
Amidst the overwhelming information, the pilot emphasised the importance of focusing on key metrics — altitude, airspeed, fuel levels, and navigation systems — to ensure a safe and successful flight.
I totally resonated with this as it’s something I coach to every business owner I work with. If you wouldn’t drive a plan or a car without a dashboard, why risk driving a business and make decisions to invest significant sums without data-driven decision-making?
Just like flying a plane, there’s an overwhelming amount of data generated across the various functions in our business – financial, sales & marketing, or opera tional – having a dashboard view that tracks the key metrics of your business’s performance is crucial to navigating the business landscape effectively.
I cannot stress enough the importance of having a dashboard with up to date information that you can review in real time. Once honed, you should easily be able to see which areas of the business are flourishing, and which may need your urgent attention. Then you can take a diagnostic approach to asking the right questions to identify the root cause challenge or opportunity.
I have seen positive impacts in the performance of many businesses just by adopting a core management discipline of reviewing their dashboard to look at key metrics.
As the brilliant management theorist, Peter Drucker, said “What gets measured, gets managed”….and what gets managed, will improve.
Here are some of the elements that I always recommend should appear on any business owners dashboard.
As you read this, ask yourself who has responsibility for these aspects within your business, and also how in tune you are with each specific area of performance – if I asked you right now, would you know?
Key Financial Indicators
Cash Flow: Positive cash flow indicates the business can cover its expenses, invest, and grow.
Cost of Sales (CoS): Helps assess the direct costs associated with producing goods or your productivity in delivery services. A lower CoS relative to revenue suggests better profitability.
Gross Profit: Indicates the profit made after subtracting the cost of goods sold from revenue.
Overheads: Fixed costs that don’t vary with production levels. Keeping overheads controlled relative to revenue is crucial for profitability.
Operating Profit: Shows the profit from regular business operations, excluding taxes and interest.
Debtors: Monitor the amount of money owed to the business by customers. High levels of debtors might indicate collection issues.
Creditors: Track how much the business owes to suppliers.
Key Business Winning Metrics
Leads: The number of potential customers generated.
Conversion Rate: The percentage of leads that turn into customers.
Average Transaction Value: The average amount spent per customer transaction.
Margins: The difference between revenue and the cost of goods sold, expressed as a percentage. Higher margins generally mean better profitability.
Recurring Revenues: Revenue from ongoing contracts or subscriptions. It provides stability and predictability to income.
Client Retention / Attrition: The percentage of customers retained over a period versus those lost.
Key Operational Metrics
Customer Satisfaction: Measured through surveys, Net Promoter Score (NPS), and feedback.
Complaints: The number and severity of complaints can indicate underlying issues in product quality or service delivery.
Reviews: Online reviews and ratings provide insight into public perception.
Employee Engagement & Retention: Engaged employees are more productive, and high retention rates reduce recruitment and training costs.
Need help with setting up a dashboard for your business? I’ve got some ready-to-deploy templates that you can start using today! Book a free 45-minute session
Discover how well you’re doing in the 6 key areas of business success with our 6 Steps Scorecard [Takes only 5 minutes]
