Now’s the time to plan for the new year.
You know the assignment: take time off from your daily business with trusted staff and advisors to reflect about what you’ve learned and plan how to make a better grow of it next year.
You may be tempted to skip planning this year, since a range of things within and beyond your control may have thwarted plans for the past few years. But this is true of any year. The past few years have just amplified the variances with a loud reminder that you never really know what will happen next. Keep your annual appointment with the future. Then after you define your goals in SMART (specific, measurable, achievable, relevant, and time-bound) terms, add an essential next step: create a business growth measurement dashboard to watch where you’re growing.
Business Growth Measurement Dashboard – How Does it Work?
A business growth measurement dashboard, like the dashboard in your car, shows in a glance whether your company’s moving closer to your goals. Entrepreneurs can be optimistic people, eager to see progress in subjective terms, as in: “It seems like we have more business this month.” But a dashboard reports the measurable aspect of your goals in objective numbers that indicate actual performance: “Our billable hours have increased 30% since last month at this time.”
With access to timely data, you will have an opportunity to proactively change course. It’s much better to find out as soon as sales are less than projected, than to wait until the end of the month or quarter when it’s too late to change the trajectory.
Here’s how to create a simple dashboard. Refer to your annual plan’s goals, and any other ongoing goals (such as maintaining sufficient income to offset revenue) to create a spreadsheet.
Label the first column of your spreadsheet “Indicators” and list the measurable indicators from each of your goals. For example, one of your goals may be, “Increase revenue from online product sales by 15% by the end of 2012.” You would note “Online product sales” as your indicator. Repeat this for each of your 2012 goals and any ongoing goals.
Label the second column “Frequency.” Record how frequently you will update and review each indicator based on how quickly you can expect to see progress. Continuing our example, you might plan to review online product sales weekly. After you’ve noted the frequency for each indicator, sort the rows to cluster weekly, monthly, and quarterly items. This will make it easier to review your progress at periodic meetings.
Label the next column “Benchmark” and record next to each indicator your company’s current status. In our example, you might note current online product sales as $10,000 per week.
Finally, label across the remaining columns the week, month, quarter, and record the status of each indicator at the appropriate time. Next week, for example, online product sales may be at $8,000; the following $15,000, etc.
5) Keep it on Target
Your business growth measurement dashboard can become quite sophisticated, but track only what is essential for watching the growth you’ve defined as meaningful. As you use your dashboard, you may find ways to simplify tracking. Perhaps one indicator can measure progress for more than one goal, making the process more efficient.
6) Keep Your Dashboard Up to Date!
Update and refer to your dashboard at weekly, monthly, and quarterly meetings. It may seem like busy work to assemble information you can reference in other ways from various reports, but the power of a dashboard is in seeing progress over time with all indicators in one place. You’ll be more likely to spot progress trends and connections that are not apparent when you see this same information in isolation.
Resilience is an imperative skill to master in business ownership. Use your business growth measurement dashboard’s numeric truth to celebrate progress and explore new solutions for what isn’t growing as expected.
[nbox type=notice]Homework: Follow the directions in this post to create your own dashboard. Comment below to let us know which metrics you’re tracking![/nbox]