Business owners can have many different types of reports to run their business but I think every business owner needs the following 3 reports:
Daily Critical Number Report
Weekly Critical Number Report
Monthly Critical Number Report
Imagine receiving a report on your desk each day that tells you what the coming month is going to look like before it actually happens. Imagine the business decisions you could make based on this information.
What are they? They all contain 3 important things:
1. Forward Looking - the reports contain forward-looking data, not historic, redundant data.
Whats the difference?
Historic data tells you what has happened in the past. It's a history lesson. It has very little to no insight into how you are going to perform in the future. Think of things such as sales, gross profit margin, net profit margin.
Forward-looking data predicts what the coming week, fortnight, month is going to look like before i tactually happens.
2. Key Performance Indicators - if you read my previous blog "Key Performance Indicators" then you will know all about these. Many business owners think they are reporting on their KPIs regularly where in fact, they are just reporting on lag results. It is like flying a plane blind in a storm with no instruments to help you land the plane, and you need to land the plane on a 20m boat. It is impossible! You need to report on KPIs.
Think of the difference between these two things:
Sales per employee
Customer appointments per week per employee schedules over the next 60 days
Two totally different ways of looking at the same end outcome. KPI #1 is the result, a lag indicator. Sales one week is the result of having a customer appointment the week prior. Therefore, if the diary is full of customer appointments in the future, providing you have a good conversion rate, sales in the future are certain.
3. Frequency - as the report suggests:
a) the daily report is given to you daily, i prefer at 8-9am as soon as you get into the office.
b) the weekly report is given to you weekly, preferably on the Friday afternoon so you can prepare for you weekly management meeting on the Monday morning and make corrective action immediately (if needed of course)
c) the monthly report is given to you monthly, preferably a few days after months end (the 1st of the next month if possible)
Why is this important? You need these reports immediately so you can make corrective action if needed. Most savvy business owners look at monthly profit & loss reports 20-30 days after months end (( say savvy business owners because many business owners don't even look at this!). It is already the end of the next month!! Get these reports a day after they happen and I guarantee you will always know what your coming month is going to look like before it happens.