When you are running a business, most business owners are focused on three things:
1. Getting more customers
2. Increasing sales
3. Earning more profit
But when these things aren’t happening many start "reacting" and a lot of random approaches start creeping in to their marketing activity.
According to Shweta Jhajharia of The London Coaching Group this is because we forget that these three areas are only important at the time of setting goals – but not when it comes to the day-to-day operations and marketing of your business.
The really important considerations are the items that lead to these outcomes.
The main thing you need to get into the habit of is measuring and managing the Five Levers that lead to the outcomes you want (customers, sales, profit):
- Number of Enquiries
- Conversion Rate
- Number of Transactions
- Average Sale Value
But the real key to managing these figures is to ensure you have a Weekly Business Dashboard where you are gathering and monitoring these important stats.
Jhajharia believes a business dashboard is important because:
1. It allows you to have a weekly overview of the measurements that matter in your business, and lets you catch any problems before they become catastrophic.
2. If and when you get a business coach, business mentor or investors to take a look at your business, having this habit in place will ensure they can get a quick and meaningful look at the business's performance. This will allow them to help you identify what is and is not working, where you should be focused, and the areas where you can improve in order to get better and faster results.
If you do not have a weekly business dashboard, then the truth is that you are not staying on top of what is happening in your business – and may not spot a problem until it is too late.
Here are a few of Shweta’s must-have elements on your weekly business dashboard:
- Gross Margin Percentage (or "Ratio") (Gross profit divided by Net Sales)
- Orders Taken
- Average Value Sale (Revenue divided by Orders)
- Leads Generated
- Cash in Bank
- Debtor Amount (the amount of money owed to you)
- Creditor Amount (the amount of money that you owe)
You will notice that this list of elements does not include things like conversion rates – which lend a deeper, richer analysis. That is because the weekly dashboard is not intended for that – you should be using those in your monthly dashboard. On a weekly basis, you want to review these eight pieces to get a quick overview of what is happening, and ensure you are on track.
Ideally, you should be measuring these against the targets you set within your strategic plan.
Keeping your dashboard maintained is time well spent as it really is the perfect way to keep on top of your business.
With the coming of age of a few businesses dashboard specialist companies, which allow data in businesses to be measured and reported event on a real-time basis, there is really no excuse not to have a dashboard in your business.