During my 40 months on the road as a small business consultant, I worked with 129 small businesses, mostly on profit and expense control jobs. On those, one of the favorite tasks was to develop a KPI or key performance indicators report. We told our clients it was their 'Cancun report' or a flash report.
We explained that on this one page flash report, they would know enough about how their business was operating to be able to go back to relaxing and enjoying their vacation because all was well with it. Despite naming it for a vacation, we made it clear that they should use this as a management tool that they monitor every week.
Using Flash Reports to Manage Better in Less TimeAfter all, in order to be in management, you need to manage. One of your best tools to enable you to manage better is a summary report of your key performance indicators. Because it's a summary, it is easy for you to read and within a few minutes, know the health of your business. Then you can dig deeper if something didn't sound right or feel right.
I typically designed a small business client's KPI report in quadrants though I've seen other formats. Once I even did a two-sided report because of how much my client wanted to review. Remember, though, that this report is supposed to be simple for your staff to pull together and simple for you to read. It's a snapshot. That's why it's called a "flash" report.
By the way, each department can design its own flash report. Obviously, their key performance indicators will depend on what information the manager wants to stay updated on. Any KPI report should change if circumstances change what is most important to review.
Sections I Used Most Often- Finance
- Sales and marketing
- Fourth quadrant determined by the type of business
This section covers the KPI's you need to know to run your business
- Cash available
- Accounts payable
- Accounts receivable
- Pending issues like taxes due, major payments pending
- Severely delinquent accounts
Sales and Marketing
- Gross sales
- Gross profits
- Major sales pending
- Customer satisfaction
- Leading product lines
- Number of new leads and lead sources
- Advertising metrics
- Employee hires
- Employee separations
- Late employees: numbers, any repeats
- Discipline problems
- Performance appraisals due / completed
- Units manufactured
- Units shipped / percentage shipped on time
- Quality control / Defects
- Safety, e.g. days without injuries
It's also helpful to do a comparison on your report by having two side-by-side columns:
- Sales this week and last week
- Production this week and last week
- Actual to forecast
You can lay it out in Microsoft Word using tables or in Microsoft Excel, which is my normal software for making a flash report.
Flash reports are meant to be quick and easy to prepare by each department manager. Most of all they give you a snapshot of your business' health. The KPI example I gave above shows you possible items to include in your small business' KPI Report. Your flash report is a tool for you to quickly be aware of the key information the shows you the health of your business. When you make it yours, you will feel more in control of what's happening in your small business.
More from this contributor:
- Business Services & Activities
- key performance indicators