Your vehicle’s dashboard can provide you with important information such as speed, distance traveled, engine status, etc. However, without the proper amount of light and information, you would not be able to see, process and understand the information provided by your dashboard.
The same could be said for your business’s dashboard. This dashboard tells you what’s happening in your business, and brings your attention to any warning lights or indicators that might pop up. Business dashboards can be in print form or electronic (which is usually the way to go), and your team of accountants can help you set it up (yeah, we’re nice like that). As long as you have a dashboard that tells you vital information about your business, the format isn’t too big of an issue.
It’s also important to keep in mind dashboards are not one-size-fits-all. In fact, another business’s dashboard might look similar to or even fancier than yours – but it simply won’t help you run your business. The key to having a useful dashboard isn’t the amount of information it provides, but rather the accuracy and relevancy of the information. Having a dashboard that specifically fits your business can allow you to make smarter, quicker decisions.
So what should your dashboard contain?
Your business’s dashboard should contain key performance indicators (KPIs), ratios, metrics, and other pertinent information that can help you make smart business decisions. In a nutshell, your dashboard should be able to quickly provide you with insight into your business.
The metrics your dashboard displays are not randomly chosen; rather, they are specifically selected to give you a better understanding of your business. The metrics you choose to monitor on your dashboard should be able to help you decide if your business is performing the mission and vision set for it. To choose which metrics to measure, it can be helpful to create a strategic map. Similar to a regular map, this map can help you see where your business is, where you want your business to go and what it will take to get there.
Business dashboards are typically broken down into four areas: client, internal processes, financials and learning and growing. Each area should contain at least three, but no more than four, metrics. If you select the correct three to four metrics (no worries, your accountants and advisors can help with this), you should have enough information to make effective management decisions. If you have more than four, you increase the risk of having too much information to sort through – you want things to be as straightforward as possible.
After all, the goal of having a dashboard is to make decision making quicker and easier. However, it’s important to remember even though having a dashboard gives you a quick look at key metrics, it shouldn’t replace your regular financial reviews and planning.
A dashboard can be a helpful tool to keep your business on track and aiming for success. Using it on a regular basis can help you monitor your business and make important decisions without having to take excessive amounts of time out of your already busy schedule.
Seem like a lot of work? We can help you set up a dashboard to keep your business on track. Seriously, just ask.