Get a Scorecard for your business
Do you care enough about your business implement a scorecard that tracks and monitors the key factors that drives your business towards success.
So what is a scorecard?
It measures the small number of measures in your business that determines success. No more than 4/5 numbers, here less is definitely more. Your not trying to track/monitor the whole business just the key factors that you know drives the sales/turnover/new customers for your business for example.
Without a scorecard how do you know what the most important thing is to do each day/week when you have so many other items also requiring or demanding your attention. We all know what happens the focus is taken elsewhere and you lose your direction and end up not achieving what you had hoped for. This is where the scorecard keeps you on track and makes you focus on your goal.
Why does it work?
When you consider that the majority of business owners only see there figures once a year when the annual accounts are produced, or some may get monthly management accounts so get insight into their business on a monthly basis, you will be tracking the performance of the key number weekly and seeing whether they have hit target or not and then doing this 52 times a year, and implementing actions to achieve those targets if they are not being met.
Now do you understand how powerful this tool is in achieving business success and really start to move forward.
What do I need to measure?
With sufficient understanding of your business to know which key numbers to measure, you need to track Input and Output measures.
Inputs – Are the items you do to drive the outputs (I.e. Emails sent, appointments held, calls made, marketing spend).
Outputs – Are the things you end up with (I.e. New customers, revenue, orders or bookings).
You will need to set a weekly target and track against that target, and then marking Red or Green if made the target or not.
A weekly meeting needs to happen to review the scorecard even if it is just you, to make sure you can see patterns and if any line has not made target this week.
And this must be printed out and put on the wall so visible to all the team.
Here is a scorecard for a business to business service provider.
They Track marketing spend against a target of £1,000 a week.
This drives new meetings which they aim to achieve 4 new meets a week.
This business tracks new clients and those that leave during the month to give a Net new client which they target to get 2 new net client a week.
Finally turnover Is tracked against budgeted turnover.
As you can see every box is either Red or Green (Or Grey Is the target/Budget numbers) this means Red – Not made target, Green is meet target or better.
The Rules of Scorecards:
1. Maximum of 10 Numbers (ideally 4-5)
2. Must be Trackable Weekly
3. Covers a rolling 13 weeks
4. All Numbers have a target.
5. Targets are Set Properly (So they mean something).
6. Input Measures and Output Measures
7. Every Number is Colored Green or Red
8. Your scorecard is Not managing the whole business.
9. Physical copy -Always – Every single week.
10. Every Number has an Owner (ideally not you) – staff members accountable their certain numbers.
Still not sure?
If you would like help or further examples of scorecards or the template above in excel format to help you implement in your business please don't hesitate to me. Remember its the key factors to success in your business and if used on a weekly basis really does drive you in the right direction.