These days nobody has the luxury of spending hours upon hours scouring detailed data about their business. It’s hard enough to keep up with changing market conditions, clients, your team, and cash flow. Yet the ability to quickly and effectively evaluate the health of your business is essential — it’s the difference between working hard and working smart.

Working smart means understanding the key elements of your business and having ways to measure and communicate how they are performing. If sales are down, what’s the reason? Is it lead flow, close rate, average job size, or a combination of all three? If client experience is up, is it consistent across your team or only in specific areas? When you know what to measure, you can figure out why things are happening in your business, then focus on managing the weaknesses and leveraging the strengths.

At Case Design/Remodeling, we use a series of charts to track trends as well as actual-vs.-budgeted results. Taken together, these charts create a dashboard that provides a quick and effective read on our business.

To work smart, you must understand how your business works. This diagram shows the complete cycle, founded on a strong team.
To work smart, you must understand how your business works. This diagram shows the complete cycle, founded on a strong team.

What to measure. The first step to creating an effective dashboard is to understand how your business works. We see business as a holistic cycle founded on a strong team that serves to build our brand (see illustration). That generates leads, which become the sales that generate the cash to invest back into the team and restart the cycle.

How to measure. The second step is to quantify each key element of your business. Under sales, for example, we measure total sales, sales by region, average job size, and close rate. Under production, we measure gross profit percentage, earned revenue, gross profit dollars, production pipeline, and client experience.

Spread the word. The final step is to hold someone accountable to create and distribute the dashboard each month. I do it for our business because the time I spend accumulating and analyzing the data gives me tremendous insights into our business. It forces me to call a “time-out” for a couple of hours each month to pinpoint what is working well and what is not.

In the coming months, I’ll explain how some of the measurements we take actually work, and how we interpret the data. Stay tuned.

—Bruce Case is president of Case Design/Remodeling.