Why you must create your dashboard

My partner, Katri, is a sales analyst in a large global corporation. What she does is compile sales data and turn it into an understandable format so that the high level decision makers can choose the right strategy and tactics to take the business forward.

One time I noticed she had created something on her PC, in a spreadsheet, that looked exactly like the dashboard in a car – with dials and everything!

I asked her how this worked. She said “Where would you be without the dashboard in your car? You wouldn’t know how much fuel you had, how fast you were going, how far you’ve come or got to go, or whether anything was about to go wrong. Not knowing this information could lead to all kinds of problems, couldn’t it?”

I thought about this and wondered how many small businesses are travelling without their version of a dashboard.
A set of accounts doesn’t constitute a dashboard. That’s more like an annual MOT. What’s far more useful is up to date information that leads to instant strategic and tactical decisions that promote growth and avert bigger problems later on.

So what would your dashboard look like? What are the key drivers in your business?
As an example, I’ve often noticed that professional service providers don’t know how much profit they make on each piece of work.

Information such as:
Total yield per client
Gross and net profit per client
Average case size
Recurring income per client
Cost of client acquisition
Lifetime client value

By knowing this kind of information activity can then be focused where it’s going to make the biggest difference. Unprofitable, or less profitable work can be phased out to make room for higher quality business.

Make no mistake – this process will make a massive difference. A number of years ago when I owned my IFA practice I doubled the turnover in six months by focusing on a smaller number of higher yielding clients.

It seems the talk of the moment is about cutting back, weathering the storm and survival, which has a certain value. But it’s not very inspiring is it?

Isn’t it far more exciting to think about real growth? Why not create your own ‘dashboard’ and use it as a tool to take your business forward?