Dashboards provide benefits for your business where your key drivers for success are smartly linked to your financial goals and business strategies.
These key drivers can be monitored from both an historic (lag) and forward (leading) perspective.
All businesses have key drivers for improving profit. These drivers are also called Key Performance Indicators or KPI’s. These KPI’s differ from service industries, to wholesale to retail businesses.
For example, a service business that hires out cranes would have a key driver to maximise the number of hours a crane is hired out to its customers such as builders, mining companies and perhaps other crane companies.
This is generally called utilisation. Clearly, the higher the utilisation, the greater the revenue. There are other factors that will affect revenue including efficiency (not having to do rework) and price per hour. But let’s concentrate on utilisation in this example.
In a normal working week, a crane can be rented for a certain number of hours. The crane is an expensive piece of equipment and having it used more will result in an increased return, and so management puts in place strategies to increase utilisation.
A simple measure of utilisation is to divide the number of hours the crane is in use, by another number. In this example I have used 38, being a standard employee working week. A spreadsheet or Dashboard app could be devised that measures this:
Week 1 Actual hours 45 Utilisation 118%
Week 2 Actual hours 47 Utilisation 126%
Week 3 Actual hours 50 Utilisation 132%
The spreadsheet could show this simply as numbers, as above, or in a graphical form. Many people prefer visual indicators, just like a car’s dashboard … hence the name for these business reports.
The outcome of tracking utilisation, in this example, is that the business owners and management team will know without a shadow of doubt whether the strategies that have been put in place to improve utilisation are actually working. By measuring a KPI like this weekly (or even daily) this allows the business owner and managers to quickly make adjustments and deal with any variances.
After all, you cannot recover from a bad month in the last week of a month, and certainly not at the end of the month. You can however, get a month back on track after a slow Week 1 or
Week 2 … and knowing exactly where the business stands in real-time like this—via your Dashboard—allows you to focus on and achieve what needs to be done to reach your monthly goal.
It’s profound the difference a Dashboard makes to a business, and ultimately to the success, prosperity and lifestyle of its owners.
That’s why we’re so passionate about educating our business clients about the benefits of custom Business Dashboards.
Let’s consider another example … say, a retail business selling products. The business owner may have decided on a specific strategy to improve revenue by selling, on average, an additional 10% to each customer by suggesting complementary items with what is being bought.
The business owner wants to measure whether the strategies are working, and so includes a KPI of ‘$ Per Sale’ in their Dashboard.
Let’s say the current daily sales are $10,000, and there are 50 sales each day. The measure will be shown as $200, being $10,000 divided by 50.
At the end of each week (or day) the spreadsheet or Dashboard app is updated for this measure, and it is very easy for the business owner to see the trend. Again, a graph may be more useful than just the numbers in order to see whether things are on track, improving, flat-lining or declining.
These are just two examples of KPI’s that can be measured in two different types of businesses. All businesses have drivers of revenue, cost of sale and expense that can be measured.
A well known management adage is, “What you can measure, you can manage.”
A key to business success is to identify what to measure and then track the effectiveness of the strategies you are implementing to improve those numbers.
In our role at NCA as your business advisors, and with our passion for building custom Dashboards for business owners, we can act just like an elite sporting coach for you… We track your performance in the measures (KPI’s) that matter most, we compare your performance to what is required to win (that is, to achieve your financial and personal goals), and we then advise and mentor you so that you end up on the winner’s dais.
Your next step…
Contact your relationship manager at NCA to discuss what should be on your Dashboard. We can then give you a fixed price proposal for (1) building the Dashboard for your business, and (2) optionally acting as your external CFO or coach, to help you keep your business on track.