When I look at a remodeling company’s “dashboard,” I’m often confused and overwhelmed by the complexity and quantity of information.
Most companies should keep it short and simple. I recommend a monthly dashboard that provides enough detail to pinpoint problems before they do real damage. Here’s how to create it.
Ten days into the month, print a P&L and balance sheet, but only after entering all bills from material vendors and trade contractors into job costs, posting all overhead bills, and reconciling bank and credit card statements. (Note: Long jobs and jobs with large deposits may also require you to calculate and add over-under billings. See Kathy Shertzer’s “Over-Under Billings at a Glance.")
Use a spreadsheet
to enter three totals from the P&L: volume (total sales + over-under billing), gross profit (volume – job costs) and overhead; and three from the balance sheet: cash (+ over-under billings), working capital (current assets – current liabilities), and total equity.
The dashboard calculates letter grades for each line item, plus an overall average (see the sample above). Act quickly to improve low grades, then track how the dashboard changes as they take hold.
—Judith Miller is a Seattle–based remodeling business consultant and trainer. remodelservices.com