KPIs for small business owners, cut back to the ones you can act on. Ando Chong on the one page scoreboard and the number that matters most.
Two failure modes, and owners are almost always in one of them.
The first is no numbers. The bank balance is the dashboard. The month was good if the account looks healthy on the thirtieth.
The second is more modern and just as ineffective. Software producing forty seven metrics across four dashboards, none of which anybody looks at, because nobody has decided which ones matter.
Both produce the same outcome. Decisions made on feel, and problems discovered a month after they could have been fixed.
Only the ones you would act on and that keep you awake at night.
That is the whole filter, and it is more useful than any list I could give you. Go through what you currently measure and ask a single question of each number: if this moved against me next week, would I do something about it? If the answer is no, stop tracking it. It is not information, it is decoration.
If you cannot see the health of your business on a single page, you do not have a reporting problem. You have a decision about what matters that nobody has made.
Most businesses end up with somewhere between five and seven that survive that test. Not because there is anything correct about that number, but because that is roughly how many things one person can actually hold in their head and act on in a week.
Rather than a prescribed list, work out which numbers answer these, in your business.
How long could we survive if the money stopped coming in? For most owners this is the number. Not revenue, not profit. How many weeks of operating costs the current cash position covers. It is the number that decides how much time you have to fix anything else, and it is the one that lets an owner sleep.
Are we selling at a margin that funds growth? Revenue against target tells you very little on its own. Revenue rising with margin falling is the warning most owners miss because they only watch the first half.
What is next month going to look like? Quotes issued, pipeline, bookings, whatever gives you forward sight in your business. This is where you still have time to act. By the time revenue tells you there is a problem, it started weeks earlier.
Are we getting paid? The ageing, not the total. If the ninety day column is growing, act now, not at quarter end.
Are we using our capacity? Utilisation, productive hours, whatever fits. It usually moves before revenue does.
Are our people staying? One number. Turnover, absenteeism, overdue reviews. People problems are the most expensive and the slowest to show up in financial reporting.
Owners worry about showing numbers to the team.
Share the ones they can actually move. Utilisation, quotes, debtor days, quality, turnaround. Those are the numbers where a person can change their own behaviour on Monday and see it in the figure by Friday. Withholding them means asking people to make good decisions without the information those decisions require.
Your own drawings are a different matter and you are under no obligation to publish them. That is not the same conversation.
A single week means very little. Three consecutive weeks in the same direction means something.
That is the discipline. Not reacting to every fluctuation, and not waiting for the quarterly meeting to notice a two month trend. Weekly review, act on trend, and the business stops surprising you.
Revenue is vanity. Size is ego. A single page with a handful of numbers you would actually act on beats a reporting suite nobody opens.
Build it this week. Start with weeks of cash cover, because if that number is short, nothing else on the page matters until it is fixed.
Only the ones you would act on. Test each number by asking whether you would do anything if it moved against you next week. Most businesses end up with five to seven that survive.
For most owners, how many weeks of operating costs the current cash position covers. It determines how much time you have to fix anything else.
Weekly, acting on three week trends rather than single week movements. Monthly is too slow to influence most of the numbers that matter.
Share the numbers they can influence, such as utilisation, quotes, debtor days and quality. Your own drawings are a separate matter.
If it does not fit on one page and you cannot hold it in your head, it is too many. Numbers you never act on are decoration.
Anderson Chong, Founder of iQuest Consulting and Business by Design.
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