I love to talk with people about what I call a dashboard. This is one of the secrets I use when we talk with you about how to make yourself operationally irrelevant and how you can manage your business in just a few days a week to do so. The majority of the time when I talk to business owners and mention the term operationally irrelevant, they say, “That’s what I want. I want to become operationally irrelevant.”

When you tell me that, you can be sure that shortly after I’m going to talk with you about creating a dashboard with your business and for your business, and that’s what the topic of today’s video is all about.


Transcript

I love to talk with people about what I call a dashboard. This is one of the secrets I use when we talk with you about how to make yourself operationally irrelevant and how you can manage your business in just a few days a week to do so. The majority of the time when I talk to business owners and mention the term operationally irrelevant, they say, “That’s what I want. I want to become operationally irrelevant.”

When you tell me that, you can be sure that shortly after I’m going to talk with you about creating a dashboard with your business and for your business, and that’s what the topic of today’s video is all about. So let’s get ready and dive into what making a dashboard can do for your company, no matter your size, no matter what your business.

Hi, my name is Josh Patrick and I’m the author of Sustainable: A Fable About Creating A Personally And Economically Sustainable Business. I’m also the founder of Stage 2 Planning Partners and The Sustainable Business. And I’m the creator of Cracking the Cash Flow Code. So let’s jump into this week’s topic.

First, let’s talk about what a dashboard is and what a dashboard isn’t.

A dashboard is a weekly report or a monthly report or sometimes is both.

In fact, with most of the companies I work with, we do a weekly dashboard which is focused on cash, and a monthly dashboard which is focused on business activities, which are gonna tell us about what’s gonna be happening in the future. So, you have often a weekly dashboard and a monthly dashboard. And if you happen to be having a cash flow emergency which happens in almost all business from time to time, you’re gonna want to have a daily dashboard as well. But with most businesses a weekly and a monthly dashboard is more than enough.

The information on your dashboard report should always tell you what is likely to happen to your cash in the future.

The problem with most people who put together dashboards is they’re really historic based, not proactively based. In other words, they’re based on what’s in your financial statements, what’s in your profit and loss statement, what’s in your balance sheet. That’s all historical information. That information is important but is not gonna tell you what’s gonna happen in your business in the future. It just told you what happened in the past which gives you the ability to have a comparison to what’s gonna happen in the future.

A great dashboard gives you specific information about what key activities are or are not happening in your company.

If you happen to be a manufacturing company, you’re going to want to know about backlog. If you’re a sales company, you’re gonna want to know about, are your sales people doing the right activities in the right manner with the right people to bring the right amount of business in? So dashboards are basically driven by what industry you’re in, and what your business needs are for you, not for other people in your industry necessarily.

A dashboard should always focus on activities that either create or eat your cash.

In other words, you need to know what your cash balances are on a weekly basis, you need to know what your receivables are, you need to know what your inventory levels are. You need to know how many sales calls your sales people are making. You need to know how many proposals are going out. What percentage of those proposals are turning to signed contracts. And what percent of those signed contracts are turning into cash. And how fast they do turn into cash. A dashboard is well designed. It’s gonna tell you about 90 days in advance whether you’re gonna have a problem in your business in 90 days in advance. This should give you enough time to take actions that are appropriate to fix those things so you don’t have a problem.

Now, as I already mentioned, a dashboard is not your profit and loss statement or a balance sheet.

So please don’t put that to the dashboard. It’s good information. You might want some of that information on your dashboard report. But you’re not gonna want to have the whole thing there. And you do want to spend time with your profit and loss and balance sheet and, even more importantly, you cash flow statement. But that’s not gonna tell you what’s happened in the future, what’s going to happen in the future.

Here’s something else which is really important about a dashboard. It has to have a comparison level. So if you’re doing a weekly dashboard you’re gonna have 13 weeks of what we call a rolling dashboard. If you do it on a monthly basis, you’re gonna have 13 month rolling basis.

Now that 13 week or 13 month rolling basis is every month or every week new information comes on and the oldest information falls off. Over a 13 week and/or a 13 month rolling basis you’re gonna start seeing trends. If you see the trend going down, you know you get a problem coming up. If you see the trend coming up, that’s a good thing but it also might cause another problem.

For example. Let’s say your dashboard says that on average you have $300,000 of backlog in your business. Then all of a sudden that backlog starts building up to $340,000, $380,000, $450,000. You know you’re gonna have a problem, you’re gonna have some unhappy customers because you’re booking more business than you’re able to deliver.

So you need to either slow down on how much business you’re booking, which most people don’t want to do, or hire people to help you deliver on that business. And you’re gonna have a month or two to get that to happen because you have an early warning that your backlog is going up and up and up. Or that backlog might mean that you’re not being very efficient as servicing the business is coming in your door. And then that’s causing you to have a bottleneck.

In that case you have to play whack-a-mole in your business. You can start whacking the things that are causing that so you can go on and fix your business and not have a problem that’s gonna bite you in the head, which is gonna make you really unhappy.

The other thing you need to do is you need to share your dashboard with the key people in your company and if you’re really brave, everybody in your company.

Now I want you to share it with everybody in your company. The reason I want you to share it with everybody in your company is because the people in your company, they’re the ones that are really gonna be able to help you work through those dashboard issues and make the changes you need to make. It’s not just your seeing your managers that are smart, everybody in your company is smart, everybody in your company cares about the success of your company because, frankly, the success in the company also is their success.

So there you have it. This is some of the information you want in your dashboard, who you want to share it with. You want to make sure your dashboard focuses on predictive numbers and not the ones that tell you what happened in the past.

Thanks a lot for watching this video. Why don’t you click on the button below and get our infographic on Cracking the Cash Flow Code. You’ll find out what stage you’re at in reaching cash flow freedom from your business. And by the way, that’s something you want to be tracking in your dashboard. How were you doing and creating enough cash to solve the four needs of your business through the lifestyle, an emergency fund when things go bad, a fully funded growth program in your company, and a fully funded retirement program for yourself.

This is Josh Patrick. Thanks a lot for stopping by. I hope to see you back here really soon at The Sustainable Business.

Topics: Video, weekly dashboard, business dashboard, business intelligence dashboard, executive dashboards, monthly dashboard, cash flow dashboard, Sustainable Business, cracking the cash flow code, dashboard, daily dashboard

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