What are my Metrics? How to Build a Management Dashboard


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  • Ektron pitch – finance professionals’ eyes glaze over
  • Exclude inventory from Quick ratio
  • What are my Metrics? How to Build a Management Dashboard

    1. 1. Accelerate the Vision<br />
    2. 2. How to build and use a dashboard<br />What is a dashboard? <br />Why does my company need one?<br />What information should go on a dashboard?<br />How do I collect the information?<br />How do I know if the information is correct?<br />
    3. 3. What is a dashboard?<br />A short “flash” report of critical data<br />Answers the question “How are we doing?”<br />Uses trends and comparisons<br />Provides high-level analysis<br />Use to identify areas in which to drill down<br />
    4. 4. Why does my company need one?<br />Internal – management team<br />Gives single view of business model<br />Defines and measures specific goals<br />Offers basis for analysis<br />Does not replace a detailed variance analysis<br />Provides important feedback loop for forecasting<br />External – investors and other third parties<br />Demonstrates understanding of the business<br />Provides objective measures of success<br />Highlights key drivers that may not be in financials<br />
    5. 5. Company, Inc. – Management Dashboard January 2011<br />
    6. 6. Company, Inc. – Management Dashboard January 2011<br />
    7. 7. What information should go on my dashboard?<br />Keep it concise – not the only report used<br />What are the 5 to 10 key performance indicators (“KPI”s)?<br />Focus on cash and cash management<br />Top line drivers<br />Bookings, revenue, renewals, attrition<br />Cost drivers<br />Headcount, Cost of Goods sold, consultants<br />Financial metrics<br />Revenue per employee, Quick Ratio, Cash burn<br />Milestones<br />
    8. 8. How do I collect the information?<br />Agree as a management team on the metrics<br />Use systems to capture relevant information<br />Accounting software<br />CRM – Salesforce.com<br />Project management software<br />Benchmarking is key – don’t be afraid to guesstimate!<br />Walk before you run<br />
    9. 9. How do I know if the information is correct?<br />Consistency is key<br />Use industry reports<br />Build a list of comparables<br />http://www.forentrepreneurs.com/designing-startup-metrics-to-drive-successful-behavior/<br />
    10. 10. Case Study – Software NewCo<br />Seed funded<br />Early revenues – license, services & maintenance<br />15 people<br />6 R&D<br />3 Services<br />2 Sales<br />1 Support<br />3 G&A<br />
    11. 11. Cash is (still) king<br />Cash balance against forecast<br />Status of collections (DSO)<br />Why the variance?<br />What are trends?<br />What’s plan B?<br />Cash burn<br />Gross burn versus net burn<br />What are key contributors to burn?<br />What are the levers available to manage burn?<br />80:20 rule<br />Quick ratio (Current Assets – Current Liabilities)<br />Financing options<br />Debt, equity, vendor financing<br />
    12. 12. Revenue drivers<br />Bookings<br />Average selling price (“ASP”)<br />Total bookings / # of deals<br />Number of units<br />Sites, seats<br />Sales efficiency<br />Bookings per rep<br />Cost per rep<br />Attrition<br />Revenue per employee – the magic number<br />
    13. 13. Cost drivers<br />Lead generation – cost per lead<br />What’s a lead? Need to crisply define.<br />Cost by department<br />Support<br />Number of calls/inquiries<br />Status report<br />Overhead<br />R&D – what are trends?<br />Utilization – when are we profitable?<br />
    14. 14. 1770 Mass Ave, Suite 150Cambridge MA 02140Telephone: (617) 823-4289E-mail: info@techcfo.com<br />TechCFOis Part of Your Team<br />