During difficult times, like now, it’s critical to have a weekly dashboard that gives you a quick update on the health of your business.
You can build one that is fancy:
These are really the best because you don’t have to INTEPRET the information. It is already pre-interpreted and it shows you in a coded manner how sick or healthy the business is.
Avoid wasting time by having to interpret the information. Take the time in advance to have it pre-interpreted for you.
Here are some GREAT indicators:
1. Cash Position. How much cash do you actually have available? Checking accounts. Savings accounts. Liquid instruments like Canadian GICs, American IRAs, and other “term deposits”, no matter what they are called. Note: Always net out outstanding checks that haven’t cleared yet.
2. Profit or margin or EBITDA for this week or this month and for the comparable period last year. This matters a great deal because you will want to know right away if the profit trend is up or down – so you can take fast action!
3. AR and AP. Accounts payable have to be current. Accounts payable need to be on time too – but tied to the level of receivables so you don’t accidentally worsen your situation by paying too quickly. Note: I’m not saying don’t pay on time. I’m saying maybe you shouldn’t pay too quickly either.
4. Units or Hours or Products Sold. The exact unit will depend on the type of business you have.
5. Accounting Ratios like inventory turnover, debt to equity, or any number of others that matter to your business. Learn what matters to your business and calculate it regularly.
6. Sales Cycle. How many days from the time the customer first hears about your offer to the day they make the “buy” decision? OR, the close rate. Or a measure of what’s in the pipeline.
7. Supply Chain. How long does it take to have your usual inputs brought into your warehouse, ready for production?
8. Employee Productivity. Hours worked this week. Overtime hours. Units made. Units sold. Units delivered. Returns. Customer complaints. Warranty claims. Production error rate.
Basically, IF you measure it, you will pay attention to it. And, you will be able to react quickly if you don’t like what you see.
God bless you, your family, and your works. You can be Catholic and successful in business. Believe it.
Sign up for the St. Joseph Workshop where Henry Kutarna, The Catholic CEO, helps your business be more profitable and more Catholic at the same time.