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How to build and use a dashboard

What is a dashboard?

Why does my company need one?

What information should go on a dashboard?

How do I collect the information?

How do I know if the information is correct?

What is a dashboard?

• A short “flash” report of critical data• Answers the question “How are we doing?”• Uses trends and comparisons• Provides high-level analysis

Use to identify areas in which to drill down

Why does my company need one?

• Internal – management team Gives single view of business model Defines and measures specific goals Offers basis for analysis

• Does not replace a detailed variance analysis Provides important feedback loop for forecasting

• External – investors and other third parties Demonstrates understanding of the business Provides objective measures of success Highlights key drivers that may not be in financials

Total

Income

4000 License revenue 3,170,917.99

4001 Services revenue 1,013,422.22

4002 Maintenance revenue 966,831.10

Other revenue 23,544.56

Billable Expense Income 100,980.85

Total Income 5,275,696.72

Expenses

6000 PAYROLL RELATED EXPENSES

6001 SALARIES 513,856.60

6002 PAYROLL TAXES 210,311.35

6003 EMPLOYEE BENEFITS 338,087.93

Total 6000 PAYROLL RELATED EXPENSES 1,062,255.88

6004 BONUS EXPENSE 23,732.68

6006 RECRUITING 115,797.00

6100 CONSULTANTS 481,270.00

6200 CORPORATE LEGAL 107,301.95

6201 PATENT LEGAL 135,355.41

6202 INTELLECTUAL PROPERTY FEES 1,629.00

6220 Content Expense 9,999.97

6300 AUDIT EXPENSE 33,786.00

6370 SOFTWARE EXPENSE 2,467.64

6400 INSURANCE CORPORATE 31,838.97

6490 SALES & MARKETING 1,486.56

6500 TRAVEL 293,033.86

6505 MEALS & ENT 100% 48,821.98

6510 TELEPHONE 29,086.98

6520 NETWORK COMMUNICATIONS 14,372.59

6559 RENT 337,936.16

6560 Payroll Expenses 6,834.21

6601 OFFICE SUPPLIES 45,851.78

6605 REPAIRS & MAINTENANCE 5,940.39

6606 Small Equipment 10,988.68

6607 Equipment Lease 4,436.04

6610 SUBSCRIPTIONS 11,005.60

6620 POSTAGE 8,552.48

6630 SEMINARS & CONFERENCES/EDUCATIO 47,095.98

6640 Advertising/Promotional

6650 PUBLIC RELATIONS 32,580.00

Total 6640 Advertising/Promotional 32,580.00

6700 DEPRECIATION & AMORTIZATION 60,962.82

6750 Bank Charges 338.76

6999 Cost of Labor 3,312,956.00

Total Expenses 6,277,715.37

Net Operating Income (1,002,018.65)

Other Income

7000 INTEREST INCOME 27,848.40

Total Other Income 27,848.40

Other Expenses

6900 TAXES FRANCHISE 3,247.86

6905 INCOME TAXES - STATE 456.00

7001 INTEREST EXPENSE 215,959.49

Total Other Expenses 219,663.35

Net Other Income (191,814.95)

Net Income (1,193,833.60)

COMPANY, Inc.Profit & Loss

January - December 2010

Company, Inc. – Management Dashboard January 2011

2011 2010 Monthly Actual$s ('000s) Average Jan Status Status

Cash Balance $2,744 $1,948 $350k in A/R slipped to FebYTD Net Burn $46 $796 Higher legal, consulting costs

YTD Bookings $709 $550 Tracking to budgetYTD Revenue $851 $625 Tracking to budgetYTD Income/(Loss) $25 ($101) Below budget because of higher costsEBITDA $45.00 ($72) Below budget because of higher costs

Headcount 27 30 Tracking to budgetRevenue per employee (annualized) $262 $250 $250k is target

Realizable UtilizationFTEs on projects 129.9 13.2Available resources 173.4 18.1Realizable Utilization % 74.9% 72.9% 3 new hires being trained in Jan

Company, Inc. – Management Dashboard January 2011

What information should go on my dashboard?

• Keep it concise – not the only report used• What are the 5 to 10 key performance

indicators (“KPI”s)? Focus on cash and cash management Top line drivers

• Bookings, revenue, renewals, attrition Cost drivers

• Headcount, Cost of Goods sold, consultants Financial metrics

• Revenue per employee, Quick Ratio, Cash burn Milestones

How do I collect the information?

• Agree as a management team on the metrics• Use systems to capture relevant information

Accounting software CRM – Salesforce.com Project management software

• Benchmarking is key – don’t be afraid to guesstimate!

• Walk before you run

How do I know if the information is correct?

• Consistency is key• Use industry reports• Build a list of comparables• http://www.forentrepreneurs.com/designing-sta

rtup-metrics-to-drive-successful-behavior/

Case Study – Software NewCo

• Seed funded• Early revenues – license, services & maintenance• 15 people

6 R&D 3 Services 2 Sales 1 Support 3 G&A

Cash is (still) king• Cash balance against forecast

Status of collections (DSO) Why the variance? What are trends? What’s plan B?

• Cash burn Gross burn versus net burn What are key contributors to burn? What are the levers available to manage burn?

• 80:20 rule

• Quick ratio (Current Assets – Current Liabilities)• Financing options

Debt, equity, vendor financing

Revenue drivers

• Bookings• Average selling price (“ASP”)

Total bookings / # of deals

• Number of units Sites, seats

• Sales efficiency Bookings per rep Cost per rep

• Attrition• Revenue per employee – the magic number

Cost drivers

• Lead generation – cost per lead What’s a lead? Need to crisply define.

• Cost by department Support

• Number of calls/inquiries• Status report

Overhead R&D – what are trends? Utilization – when are we profitable?

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