Your reports and dashboards are only as good as the data behind them.
Know what keeps you and your staff awake at nights
Finding answers to critical business questions and making good decisions is vital to SMEs as their business’s success depends on it. Unlike bigger businesses, corporations and government they have a margin for errors and they can bury their mistakes.
When designing reports and dashboards, first define the reports for management and the team. What is their key metrics and where will you source the information and knowledge?
Be sure and align the metrics with your business purpose, vision and objectives. Take your business objectives, determine the metrics that measure those objectives, and map those metrics to the capabilities of the people involved.
Make sure you understand the key data points that give insight into those tasks and the best frequency for reporting that data. You need to capture that information and knowledge that makes sense, is relevant and leads delivering meaningful metrics.
Identify your information and knowledge sources early. Consider working backwards. Plan your reports first and then configure the application by adding custom fields, formulas, and so on.
“It is good to rub and polish our brain against that of others”. Michel Eyquem de Montaigne
As you move your information and knowledge from exactness to decision-making and realising the bigger vision of aligning customers and markets through data enhanced value chains, however, will require addressing critical issues of involving the IoT, connectivity, big data and mobility.
Planning is the key to capturing and displaying the correct metrics.
Are you capturing the right information and knowledge to drive your future
If you want to take your business to where you want it to go you need a clear understanding of what’s going on. This means tracking the right metrics so you have solid data to make informed decisions and keep your activities aligned and on the right track.
Sales and revenue
This is the amount of money you’re generating in sales less any returns. Tracking this metric on a daily, weekly or monthly basis will tell you whether your sales are increasing or decreasing so you can take immediate action.
Knowing exactly how sales are tracking enables you to take any corrective action and to adjust sales activities and inventories accordingly.
Keeping track of your sales revenue is great, but without knowing your expenses, you won’t know your monthly profit. You could be having a wonderful time with sales but your overhead and operating expenses could be blowing out. If your expenses suddenly get out of control you won’t stay in business for very long.
Be warned, it doesn’t take a very big increase in expense before your business goes on a downward spiral that could be hard to stop.
Once you know your total revenue and expenses, you can calculate your profit to know how much money you’re really making. If your profit margins are low, you can either increase sales or reduce expenses.
Without tracking your profit, you could unknowingly be incurring expenses that are causing your business to lose money. It’s a good idea to track this metric weekly or at least monthly, to ensure your stay on track with your profit budget.
Debtors and inventory the cash traps
Just because you are making a profit doesn’t mean you will have a strong positive cash flow. As you increase sales you will be needing more money for debtors and stock. It is, therefore, important to track the ageing of both you debtors and inventory.
In order to maintain positive growth in revenue and profit is important to know how effective your marketing is, which marketing activities are working and which are not. After all, it is your marketing that really drives your business and what’s not working needs to be adjusted or replaced as quickly as possible. Good information about your marketing also allows you to direct your marketing effort to where the fruit is plentiful.
Cost of acquiring a new customer
Your cost per acquisition is how much it costs you on average to obtain a new customer. To calculate your cost per acquisition, take the total amount of marketing expenses over a period of time and divide by the number of new customers it generated. You need to be sure your acquisition costs stay under control.
Your customer experience
This metric tells you how happy your customers are and whether they are becoming advocates or detractors of your business. This might simply mean starting by tracking which customers are increasing purchases and which ones are in decline.
The rationale for capturing the right information and knowledge
If you’re not reviewing metrics regularly you’re left to go on hunches, and hunches aren’t accurate. How many metrics to you need to properly control and guide your business.
How do you know what people, or skills, you need if you don’t know what it takes, to run the business and what you are trying to achieve and what is going on in the marketplace?
You also need to find and capture the necessary information and knowledge you already have in the business. Of course, this knowledge is no good unless you share it with others and refine it with them.
Establish what new information and knowledge you must know about in order the run and grow the business successfully. Once you have the basic metrics working well all day every day you can start to investigate the IoT and Big Data to really put some firepower into your business.
With the world’s knowledge doubling every 12 months, the impact of information and knowledge is obvious, it consumes the attention of its readers. Therefore, a wealth of information creates a poverty of attention.
The way you filter and optimise the use of information and knowledge delivered is, therefore, critical to your business. You must leverage any investment in the re-engineering of your business by creating and assisting in disseminating the right knowledge to the right people at the right time.
Perhaps a detailed Business Health Check will help you to more clearly establish what needs to be don in your organisation to stop the struggles and get everything working well all day every day.
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From personal experience, I know that businesses need to be always changing and improving to grow. By keeping a close eye on the quality of information, knowledge and metrics, you’ll have an indication as to which areas of your business need your attention most.
You can then make better decisions and adjustments to continue to improve profitable growth and the sustainability of the business.
Don’t ever be fooled into thinking you can keep all your numbers in your head. I have known a lot of millionaires who went broke because they thought they knew what was happening in their businesses. Numbers have a habit of compounding into either a profit or a loss.