Here is a quick and dirty perspective on reporting in a small business environment that might save you time and serious money. First, we recognize that you have to monitor things that have the potential to seriously damage your business. These are rather few in comparison to the information gathered and reports produced that have a limited value compared to the costs of their production. You want to create useful reports based on the “Key Metrics” of the business.
For every report, there must be a money related decision at the end of it.
Sometimes small businesses get into the Big Business trap of producing reports that get a life of their own…without any real monetary benefit.
Test your current reports.
- Who gets it?
- What information do they look at?
- What are the ranges of the data in the decision-making process?
- What decisions are made based on the data? Note: If the decision will be made without the report, it doesn’t count.
- What are the total costs of the actions taken PLUS the total costs of producing, distributing and reviewing the report. Think hard! Capture everything!
- Calculate the actual monetary gain or loss associated with a good decision versus a bad decision, based on the report. Note: you can use a couple of approaches here. (Min-Min), take the probability of the worse event based on a bad decision multiplied by the cost. OR, (Max-Max), take the probability of the good result based on a good decision multiplied by the benefit. OR, combine them.
- If the costs outweigh the benefits, kill the report.
Generating New Reports?
- Take a bottom-up approach
- Have someone evaluate the Key Metrics of the business, department by department and identify what is important
- If you succeed, it’s good for you, it’s good for your employees and it’s good for the community.
- If you need help, reach out to Partner America.