Dashboards for small business
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This PowerPoint describes the basics of a dashboard suitable for small business owners. The use of the simple dashboard to increase profits is explained.
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Dashboards for small business
- 1. DASHBOARDS A great business tool for small and medium businesses
- 2. 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 IF YOU CANNOT MEASURE IT, YOU CANNOT MANAGE IT
- 3. 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. Stagnant growth BUSINESS OWNERS CONCERNS
- 4. Is this your end of month ? Do you have multiple sources of data to try and understand?
- 5. Mar 14 Apr 14 Ordinary Income/Expense Income Govt Subsidy 2,500.00 2,500.00 Sales (Sales) CNC 29,110.05 29,110.05 Engineering 27,877.56 27,877.56 Pumps 30.00 30.00 Total Sales (Sales) 57,017.61 57,017.61 Total Income 59,517.61 59,517.61 Cost of Goods Sold Consumables CNC 3.59 3.59 Engineering 24.02 24.02 Gas 320.00 320.00 Consumables - Other 9,607.32 9,607.32 Total Consumables 9,954.93 9,954.93 Freight & Handling Fees 1,036.40 1,036.40 Materials 32,880.48 32,880.48 Other Manufacturing Services CNC 1,836.00 1,836.00 Other Manufacturing Services - Other 4,245.94 4,245.94 Total Other Manufacturing Services 6,081.94 6,081.94 Wages CNC 20,041.58 20,041.58 Engineering 26,745.00 26,745.00 Workshop 5,944.08 5,944.08 Total Wages 52,730.66 52,730.66 Total COGS 102,684.41 102,684.41 Gross Profit -43,166.80 -43,166.80 Expense Accounting Fees 555.00 555.00 Advertising 377.90 377.90 Computer / Office Expenses 205.17 205.17 Consultancy 1,866.20 1,866.20 Depreciation CNC 8,747.58 8,747.58 Eng 4,194.49 4,194.49 Depreciation - Other 937.08 937.08 Total Depreciation 13,879.15 13,879.15 Donation 48.00 48.00 Electricity 3,109.02 3,109.02 Freight & Courier Fees 155.30 155.30 Govt. charges (bad tax, stamp duty, etc etc) 0.10 0.10 Insurances 1,738.35 1,738.35 Internet 111.52 111.52 Lease / HP - CNC HAAS 5th axis + HAAS table 306.15 306.15 Okuma LB300MC-SSB 397.82 397.82 Okuma Mill MM56VA-S15 683.07 683.07 Total Lease / HP - CNC 1,387.04 1,387.04 Lease / HP - Motor Vehicles Amarok 120.62 120.62 Multivan 145.68 145.68 Total Lease / HP - Motor Vehicles 266.30 266.30 Lease / HP - Office Equipment SBS Server System 119.22 119.22 Total Lease / HP - Office Equipment 119.22 119.22 Magazines & Subscriptions 5,430.00 5,430.00 Motor Vehicle Expenses Fuel & Parking 1,107.72 1,107.72 Registration & Insurance 193.30 193.30 Every month same spreadsheet. Boring and difficult to read.
- 7. 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 WHY ARE BUSINESS PERFORMANCE REPORTS IMPORTANT?
- 8. Easy to understand visual presentation of business information
- 10. …Select All …Chemix Labs Ltd …Chieftan Four Inc. …Credit Union of The Rockies …Cross Western Store …FH Overseas Export Inc. …Up to one million customers FILTER SELECTION
- 14. …Millward …Murphy …Smith …Wilkinson …Young …up to one million suppliers FILTER SELECTION
- 16. 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 USING THE DASHBOARD
- 17. Monitor your business Regularly use the information displayed Act on findings Review outcomes PREVENTION
- 18. 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 DASHBOARDS
- 19. THANK YOU Gary Willis www.red49.com.au www.wheresmyprofitgone.com
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
- 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
- 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
- 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 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.
- 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.
- 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.
- This is a basic dashboard. This dashboard can be very easily produced from your business software. There are many dashboard systems available. However for the small and medium business owner an easy to read and understand dashboard is all that is required. Dashboards can be any design you like, they can be line graphs, pie charts, donuts, car speedometers, any design to suit the users requirements. However, studies show that most people quickly understand the column and bar charts that provide a visual indicator and comparison. A dashboard usually is the size of one page and may contain up to nine charts all with filter options. Let’s investigate the operation a little further. Looking at the sales to customers. The red arrow on the screen is indicating the sales to customer graphic. In the next slide we will review this graphic in more detail.
- We can see that the performance of our customers is portrayed in a column format. This is for indicative purposes one month only. However, we can add many months and budgets into the chart which gives a quick view of the business performance in any timeframe We can see on the chart a grey box with sales to customers and a funnel shape inside. Lets click on the funnel.
- The funnel is the filter. The click brings up a filter selection section where you can easily select the customers you want to look at. Just tick the relevant box and hit the enter key. Most dashboards are able to handle one million plus lines of customer data. The data used in the dashboards for this presentation consists of 500 customers.
- As you can see the customers have changed to the ones selected in the filter. The filter also allows you to select your top ten customers or other parameters you may require. We are not restricted to just the purchases by the customer, it is easy to determine what products are selling and even profitability by customer.
- Back to the dashboard. Lets try the same function on purchases from suppliers.
- As you can see in this example we have more information shown. Two months and year to date is indicated. Again clicking on the Suppliers selection box we get the filter option
- In this case we are going to add these suppliers to the graph already shown
- As you can see we have now increased the number of suppliers on the dashboard chart. We are not limited to suppliers, we can chart purchases by part numbers, SKU, stock categories and many other parameters.
- 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