Navigating to Your Vision with Reality

As I fly to Las Vegas for a conference, I look out the window from 30,000 feet and see the land laid out before me. Topography not easily seen from ground level is made clear at altitude. Areas that were once vast inland seas are made obvious. I can understand why a river is dammed at a particular point or the logic behind building an airport away from the urban sprawl. Then it occurs to me that what I’m seeing is an analogy for business.

Many businesses are stuck in the day-to-day. You can say they lose the forest through the trees. Some don’t have the ability to get above the fray. Others don’t know-how. Still, others don’t understand the benefit. Whatever the reason, their inability to see the big picture is at best stunting their growth or, at worst, heading them towards disaster.

Invest in your vision

The truth is, it can be easy and affordable for an entrepreneur to build a new perspective. The answer lies in creating a business dashboard that distills your numbers to those most important, and displays them in a way that clarifies important trends and areas requiring greater attention.

Although dashboard data may come from several sources, gathering it should be easy. The key lies in using the right software, configuring it to your needs, and taking advantage of its robust reporting features. Any of the leading accounting software systems can provide a wealth of information but the trick is to recognize the information you need to be looking at. Couple that with a good Customer Relationship Management (CRM) system, a payroll system, and a website and you have the ability to gain decision-aiding insight into your business.

This is actually how I ended up creating the Clarisent Clearview Dashboard™. But I wanted to take things one step further. I wanted my clients to be able to monitor their numbers and also their personal goals as well. And so to that end, the Clearview Dashboard™ has come to be more comprehensive because not only is it customized to the unique needs of our clients, it also tracks a diverse range of KPIs. Such as those that affect the financials, ones that correspond to operations, those that have bearing on marketing & sales, and even the ones that affect our clients’ personal fulfillment.

So, where do you start?

You begin by asking yourself two questions and making a list of your answers. The first question is, “What numbers reflect the health of my business?”. These might include gross sales, net profit, free cash flow, amount of returns, inventory turnover, or accounts receivable over 90 days old. Health numbers often are leading indicators. Use them to determine if your business is on a strong foundation.

The second question is, “What numbers reflect the drivers of my business?”. These might include sales per rep, revenue per employee, cost per unit produced, or sales closing ratio. Driver numbers are often trailing indicators. Use them to determine if the business is headed in the right direction.
Organize the numbers into categories, show them month by month over 13 months, compare them to the prior year (and perhaps your budget), and Viola! – you have a Business Dashboard.

The idea here is to draw key numbers from all aspects of your business. Financial numbers are good, but virtually meaningless when viewed by themselves. That’s why I suggest showing 13 consecutive months individually and last year’s figures. That way month-by-month comparisons reveal trends and unusual variations that can be investigated further, and prior year comparisons provide a historical perspective for better context. Drawing numbers from other business areas can help you better understand how they affect each other and aid you in charting a course of action. To piece a more complete picture, don’t shy away from including figures from sales, marketing, manufacturing, labor, jobs, productivity, and operations.

The key to building a dashboard that meets your requirements, is to understand how these numbers are produced, what they mean, and the relationships they share with one another. Without that knowledge, you may not fully comprehend how they change and – arguably, most importantly – how to bring effect to them.

When properly set up, a business dashboard can empower you with an eagle-eye view of your business that will help you chart, monitor, and manage its course towards your vision.

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