Dashboard Basics
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An overview of the use of dashboards in business analysis. No more spreadsheets to try and understand. Great tool for SME businesses.
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Dashboard Basics
- 1. FINANCIAL CONTROL IN YOUR BUSINESS Know What Makes You Money Know What Takes Your Money
- 2. DASHBOARDS A great business tool for small and medium businesses
- 3. WHY ARE BUSINESS PERFORMANCE REPORTS IMPORTANT? Diagnosis Relevant information gathering Breakdown of information Cure There is not ‘one fix’ Design and implement corrective actions Prevention Use an on going monitoring regime
- 4. BUSINESS OWNERS CONCERNS Business owners have areas of concern. Some common ones are: 1. Lack of bottom line profit 2. Cash shortages 3. Identifying and reducing costs 4. Growing revenue 5. Growing the business
- 5. IF YOU CANNOT MEASURE IT, YOU CANNOT MANAGE IT How visible is your business performance? Over 51% of owners do not review their businesses performance Why? What are the most common reasons? 1. Do not have time 2. Do not understand the business reports 3. My business seems to be tracking ok , why bother? 4. My accountant looks after the business reports
- 6. Is this your end of month ? Do you have multiple sources of data to try and understand?
- 7. A snapshot of a business cost report. Very difficult to understand
- 8. M ar 14 Apr 14 Ordinary Incom e /Expe ns e Incom e Govt Subs idy 2,500.00 2,500.00 Sale s (Sale s ) CNC 29,110.05 29,110.05 Engine e ring 27,877.56 27,877.56 Pum ps 30.00 30.00 Total Sale s (Sale s ) 57,017.61 57,017.61 Total Incom e 59,517.61 59,517.61 Cos t of Goods Sold Cons um able s CNC 3.59 3.59 Engine e ring 24.02 24.02 Gas 320.00 320.00 Cons um able s - Othe r 9,607.32 9,607.32 Total Cons um able s 9,954.93 9,954.93 Fre ight & Handling Fe e s 1,036.40 1,036.40 M ate rials 32,880.48 32,880.48 Othe r M anufacturing Se rvice s CNC 1,836.00 1,836.00 Othe r M anufacturing Se rvice s - Othe r 4,245.94 4,245.94 Total Othe r M anufacturing Se rvice s 6,081.94 6,081.94 Wage s CNC 20,041.58 20,041.58 Engine e ring 26,745.00 26,745.00 Work s hop 5,944.08 5,944.08 Total Wage s 52,730.66 52,730.66 Total COGS 102,684.41 102,684.41 Gros s Profit -43,166.80 -43,166.80 Expe ns e Accounting Fe e s 555.00 555.00 Adve rtis ing 377.90 377.90 Com pute r / Office Expe ns e s 205.17 205.17 Cons ultancy 1,866.20 1,866.20 De pre ciation CNC 8,747.58 8,747.58 Eng 4,194.49 4,194.49 De pre ciation - Othe r 937.08 937.08 Total De pre ciation 13,879.15 13,879.15 Donation 48.00 48.00 Ele ctricity 3,109.02 3,109.02 Fre ight & Courie r Fe e s 155.30 155.30 Govt. charge s (bad tax, s tam p duty, e tc e tc) 0.10 0.10 Ins urance s 1,738.35 1,738.35 Inte rne t 111.52 111.52 Le as e / HP - CNC HAAS 5th axis + HAAS table 306.15 306.15 Ok um a LB300M C-SSB 397.82 397.82 Ok um a M ill M M 56VA-S15 683.07 683.07 Total Le as e / HP - CNC 1,387.04 1,387.04 Le as e / HP - M otor Ve hicle s Am arok 120.62 120.62 M ultivan 145.68 145.68 Total Le as e / HP - M otor Ve hicle s 266.30 266.30 Le as e / HP - Office Equipm e nt SBS Se rve r Sys te m 119.22 119.22 Total Le as e / HP - Office Equipm e nt 119.22 119.22 M agazine s & Subs criptions 5,430.00 5,430.00 M otor Ve hicle Expe ns e s Fue l & Park ing 1,107.72 1,107.72 Re gis tration & Ins urance 193.30 193.30 Every month same spreadsheet. Boring and difficult to read.
- 9. “Costs do not exist to be calculated. Costs exist to be reduced” Taiichi Ohno
- 10. DEMO DASHBOARD
- 11. USING THE DASHBOARD By using the information from the dashboard functions, corrective actions can be applied to the business Targeted cost reduction programs Marketing & sales initiatives Supplier pricing performance Customer activity Stock turnover
- 12. SOME COST EXAMPLES High labour costs to sales in particular overtime Slow moving stock items High general business costs /fixed expenses Low gross profit and contributing factors Compare actual to budget performance Reduced sales, are customers dropping off?
- 13. PREVENTION Monitor your business Regularly use the information displayed Act on findings Review outcomes
- 14. DASHBOARD CONCLUSION Converts data into valuable information Easy to read Simple visual graphics Filter capabilities Great for report generation Saves businesses money If it’s data it can be made into a dashboard
Editor's Notes
- Dashboards: A great business tool for small and medium businesses, this presentation indicates how dashboards can be easily incorporated into your business’s operation and the real benefits that can be obtained from their use. This presentation is brought to you by r3 rapid read reports
- Why are business performance reports important? The data contained in the report can be turned into valuable information. To assist the business owner understand the performance, relevant information needs to be gathered. This information can be broken down to indicate the areas of concern and growth in the business. This is not different to gaining information from your business, breaking it down, analysing it and giving a diagnosis. Reviewing the information the owner can determine the cure for the concerns. There usually is not ‘one fix’ . Armed with the valuable information the owner can design and implement appropriate corrective actions. Prevention. Once the corrective actions have been put into place, the owner will need to monitor the ongoing effectiveness of these actions. A common time frame is monthly.
- Business owners have areas of concern about their business. The following five are the most common we hear. Lack of bottom line profit. Owners say our sales are good and our margins are quite strong but where has the profit gone? The bottom line of our business is always below expectations Cash shortage. There is never an excess of cash in the business, sometimes we struggle to meet our required payments and we are not building up any reserves Identifying and reducing costs. We do not have the time or knowledge to review our business reports, we are unsure which costs are unnecessarily eating away our profit 4. Growing revenue. Our sales do not seem to increase and we never know how are customers are performing. We cannot track how well new initiatives are performing 5. Stagnant growth. Our business does not grow, we cannot increase our footprint in the market
- There is a very true saying “if you cannot measure it, you cannot manage it” I ask the question “how visible is your business performance”. Do you know multiple surveys results indicate that over 51% of business owners do not review their business performance. Working with businesses we have found that this figure is conservative and from our experience we put it closer to 60%. The most common reasons are 1. Do not have time. Very busy running the business day to day. Find the business report formats which consist mainly of spreadsheets difficult to understand and gain information from. My business seems to be tracking ok, we seem to be making money why would I bother? 4. My accountant looks after the reporting side of the business. They let me know every financial quarter how the business is going. Of course they also charge me for this service
- Does your end of month look like this? Do you get reports from multiple sources? Many spreadsheets with rows of figures? For the business owner to start to understand the importance of the data it must be presented in a easy to read format.
- This slide is a snapshot of a medium size business costs, as you can see it is very difficult to interpret the data and gain valuable information.
- This is just an example of a basic profit and loss report from a popular accounting software. For the untrained eye it is boring and difficult to read. But contained in this mass of figures is some very interesting data, how do we turn the data into useful, easy to understand information? All will be revealed shortly.
- The dashboard has turned the rows of data into valuable information that will allow you to understand your business performance. Target areas of unnecessary costs. Every little bit of extra cost eats away at the profit. The effect of just a few small changes can result in a stronger profit result Track the performance of marketing and sales initiatives, you can review if the increase in customer activity and increases in revenue. Determine if you are getting bang for your buck that has been invested in the marketing and sales initiatives Keep track on what your supplier charges you. Track what you spend with any particular supplier. Use data to negotiate better pricing schedules Importantly keep an eye on how your customers are performing and take action to increase their purchases from you. Record stock movement by a variety of identifiers. Part number, SKU, category. Identify fast and slow movers and implement stock control processes
- The well known saying ‘prevention is better than a cure’ is very true in health and in business. Business owners like you must adopt the habit of reviewing your business. We do not mean everyday but once a month is usually good enough. Look at the information displayed visually by the dashboard, correct areas of underperformance before they escalate, so act on the findings from the visual data and importantly see out the outcomes are affecting your business.
- In conclusion. Dashboards: Converts business data into valuable information Are easy to read Simple visual graphics Filter capabilities Great for report generation to the board, to other stakeholders and for your business unit managers back to you Reduces the time and frustration of spreadsheet analysis and importantly helps to diagnose the sources of pain in your business Assists you to beat the profit eating costs