As a business owners and leaders, data is our friend. And in my experience the healthiest businesses have a good understanding of what kind of data their company needs to run like a well-oiled machine.
As someone who’s often tasked with operating the business side of the equation while the team lives in their zone of expertise, I’ve developed key vantage points I use to make company-wide decisions that I’ve detailed below.
1. Financial
Money, the lifeblood of any business.
You often hear it’s important to have a “firm grasp” of your numbers, but what does that actually mean?
To me it means that we understand how our decisions will impact / are impacting our financial stability and growth, we know how much runway we have at our current burn rate, we understand our profitability and why the numbers are the way they are, and how to pull different levers in a low-risk way.
From the highest level, you’ll want to know your gross profit and margin, where your money’s going once it comes in, how predictable is money coming in, and how much cash you have in the bank.
Here’s an example of what I may look at to demonstrate company financial health monthly & annually (numbers made up). Above these are an itemized breakdown of the revenue and expenses that contribute to these numbers.
Let’s take a quick look at each of these numbers.
- Expenses / People: What it costs to run our business, and how that adapts over time.
- OpEx = Operating Expenses. It’s helpful to know what % of your revenue is being dedicated to running the business.
- Revenue: How healthy our top-line sales are.
- MoM rev change = % Change in revenue compared to the previous month.
- Profit/Loss: What we took home, or lost, after expenses (pre-tax).
- Profit margin: % of our total income that leaves as profit. In other words, how efficiently we produce revenue.
Your business model, products / services you offer, how much you’re growing, and how risk-adverse, among others, should influence your finance model. And more often than not, I end up pick-and-choosing aspects of different models to help have one system of multiple ‘frameworks’
Generally, I like the Profit First model for solo / small businesses that are seeking stable growth, and if you’re completely unsure I recommend reading a bit about it as well as gaining a baseline knowledge of finances. But, there are many systems, and rarely will one system as-is be perfect for your company.
More granularly than this, I also want to know how profitable each individual product / service we offer is.
To discover this, I’ll often create a simple calculator, like the one below, that takes in our expenses and spits out a gross margin. Setting it up as an interactive calculator is important so that as things change in your company, you can quickly gauge how profitability will be impacted too.
Here’s an example (numbers made up). This example is for a service with a set start and end date, for ongoing services you’re going to run the same calculation but with fixed and variable costs at varying durations of service.
I reference this data when thinking through viability of staffing or other expenses, pricing, or any other decision that impacts finances around a product or service.
While something can make perfect sense from one angle, if it doesn’t support the company financially it likely isn’t an ideal long-term solution.
With that being said, I also believe companies would benefit from not maximizing for profit at every single turn.
2. Team Bandwidth
This vantage point is both future-looking to help us staff work and manage workload, as well as retrospective to help us understand where our time’s being spent.
For service-based businesses that need data around staffing as one example, I’ll use a perspective like the one below to see how the next 2, 4, 6 or more weeks are looking for us internally. This is helpful for us as well as for setting client expectations.
Here’s what I may see when going into a workload vantage point. If I’m curious about any specific day, or where time is being spent, I’ll expand it to see the specifics.
In this case, we’re in a light spell with service work and if we have salaried employees with variable duties, we may look at how to better allocate resources during this time.
3. Projects
My goal with this perspective is simple: Understand the status of all of our strategic initiatives across the company.
If a project is off-track, it’s helpful to know how adapting its timeline will impact our other in-progress work. Or if a project has stalled because we’re waiting on client feedback that’s overdue, I want to know that at a glance, too.
This vantage point can be applied to individual projects, too, but with slightly different & more granular goals.
Here’s an example of a Project vantage point I may have. As always, if I want to dig deeper into anything I see here, I’m able to do so.
When setting up a work management system, it’s most important to understand what data you / your team needs in order to make better decisions, and work from there.
For more on how I approach that process, check out this recent case study: The Simple Work Management System Sitemap.io Uses to Run Their Agency
4. Metrics
Lastly, I leverage a metrics or dashboard view with a simple goal: Get a summarized view of the most important metrics for our company, project, or initiative — both as a snapshot and over time.
My company dashboard will look different than a project dashboard, but the purpose remains the same.
This means that in order to get the most use out of this vantage point, you must identify the metrics that are most-indicative to the progress you’re looking to make for the company or within a particular venture.
Once you have those, the setup should be the easier part.
Here’s an example of a dashboard I may use for a big project.
Let’s look at each of these elements.
- Workload by Status: Generally where we’re at with this project.
- Open Tasks by Assignee: Who has the most work left on their plate to bring it to the finish line.
- Latest Activity: What’s everything that’s been touched in the project today.
- Tasks Due This Week (or overdue): The highest-priority work in the project.
While these aren’t pictured above, a few common metrics I may have in a dashboard:
- Sales metrics like revenue or conversions
- Awareness metrics like NUVs or reach
- Time usage
I hope you found this useful!
I aim to make these genuinely useful for you and I hope you took away at least one useful nugget. If you’re looking for additional support in building your business thoughtfully, please don’t hesitate to reach out via my contact form, or at alex@alexcartmill.com. If I’m not the best fit for you, I’ll do my best to point you in a better direction.