Key Performance Indicators make our Small Business Owners Happy
Today seemed like a great time to show you a photo of a business owner with one of our business consultants. The owner is Erik Ekman of Outside Van. Their business has grown aggressively in the past three years, and we were hired in September, 2013 to help them get their hands around the operations management.
First and foremost, we were charged with helping them get to the next level via the financial management.
Early on, we built a one year strategic plan for the business, bringing together the leaders of Outside Van, and the business consultant, and came up with some healthy early steps:
- Bring all bookkeeping back in house, and help the (now) Controller get better QuickBooks skills.
- Help close & report the financials each month,
- Create a dashboard of key performance indicators (KPIs) for the owner and COO,
- Be prepared for drilling down on the closing reports in a monthly management meeting
- Keep the ideas flowing for future growth and better business practices
This photo was taken at the management meeting in November, 2013, when we reviewed the financials of July-September. Our business consultant had been working with the team for just over 2 months. The news we delivered wasn’t all good. However, it was true, AND everyone knew the missing pieces. There had been a few growth expenses that were significant – like moving to Troutdate, Oregon from Clackamas. The one page KPI summary, showed the business monthly expenditures for items such as:
Brand development costs, including purchases and people;
- Project costs, including materials and labor;
- Moving costs;
- Unearned income;
- Cash on hand.
Erik Ekman was so happy, he got up from the meeting table and gave his business consultant a hug. What’s important to know about his KPIs is that the numbers are from a mix of the Profit & Loss, the Balance Sheet, and other measurement tools in the business. At Outside Van, some of the brand development includes asset purchases. Those cash expenditures (even though they are a mix of asset purchase, payroll expenses and other direct expenses) are the monthly amount the owner wants to see. These KPIs help him understand the overall business health. The entire page of data is a variety of numbers from the Rasta Sheet (an internal data sheet), the Balance Sheet, and some from the Profit & Loss.
A business dashboard is one really worthy page. Worthy of a hug. And, repeating again next month. We also want to take a moment to thank Outside Van for the fun project, and letting us share a bit of their story. We look forward to continuing the growth with them.
About the Author Barb Fisher
Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).