National Clothesline

Do you have a dashboard? No, not the dashboard in your automobile that tells you how fast you are going and provides other mechanical information.

I am writing about your need for a business dashboard in your office. One that you can glance at and know whether your company is operating the way it should be. It will tell you how fast you are growing or shrinking. You will know if your labor numbers are where they should be.

In other words, a business dashboard is used to measure, monitor, and manage your company.

Measuring your business performance this way has become so popular, specific software has been developed to handle the task. If you know how to use a spreadsheet program, such as Excel, you can create your own dashboard. You can use graphs or numbers, whichever way is better for you.

It sounds easy, but it takes some thought to determine the driving forces or key business indicators that make your company tick. You can have too much data or too little data, thus you need to sit down and analyze those key indicators. I am going to call the measurements metrics.

As the owner of your business, you are probably driven by two lines of your Profit and Loss Statement — if you have a P & L. The top line is sales and the bottom line is profits. What other items should you be measuring to learn the heartbeat of your business?

Do you count the number of new customers who come in every week?

I would definitely want that information on a weekly basis. It is a great indicator of how well your marketing is doing. That gives us two metrics, including collected sales dollars. Let us make our goal between five and nine metrics so we do not have a plethora of numbers in front of us.

Total customers in the database will indicate if you are keeping your customers. You might consider that important enough to look at every week.

Number of pieces marked in should be on that dashboard list. Total hours of productive labor (cleaning, spotting, finishing, inspecting, assembling and bagging), when combined with the number of pieces processed, will give you PPOH.

PPOH is an abbreviation for pieces per operator hour. It is a simple way to determine if you are operating the production department efficiently. Take the total pieces produced and divide that by the number of hours worked.

We now have sales, number of new customers, total customers in the database, pieces marked in, production hours worked, and PPOH on our dashboard.

Wow, we are up to six metrics. Are those six enough to let you know how well you are doing? What else do you want to add to this list? Do you want all six of these metrics on your dashboard? Do you want a column or columns of the prior year’s metrics to compare with?

I believe average revenue per piece might be included. It is a simple calculation taking the total drycleaning revenue, and dividing that by the total number of drycleaned pieces. You could do the same with shirt laundry, if you wish.

Another potential measurement to consider is the average number of sales dollars per hour a counter sales representative handles. If you have routes, you could measure route sales per mile and/or route sales per stop.

How about measuring the number of reprocessed garments or customer complaints? Is that data important enough to put on your dashboard? You might consider claims or on-time production as other areas of measurement.

In 2005, British Airlines CEO Willie Walsh focused on on-time arrivals. It was his feeling that if he focused on that area everything else (customer satisfaction, rebooking expenses, etc.) would fall into place. For one year, he focused on that metric. That focus turned his company around.

The key is to determine what you feel are the most important bits of knowledge you need to run your company. Taking money out of your register and putting it into your pocket will not make you a businessperson. You might be profitable, but you will not really know what is happening in the operation of your company.

Do not get stuck on financial metrics. Look at other parts, such as customer retention and operational performance, that contribute to the success of your company.

Strategic planning is a key element of your business health. Your business is like a living organism. If you do not continue to feed it, there will be no growth, only stagnation.

Planning is an ongoing process that should be initiated from the onset of ownership. You can have a one-year plan, a three-year plan, a five-year plan and, if you want to stretch things out, go for a ten-year plan.

When a new buyer of a well-established drycleaning business recently called me, he complained about his bad luck. He had lost employees and sales were down. I asked him what kind of business plan or strategic plan he had in place.

Of course, he had neither. His so-called bad luck was the result of not planning.

Failing to plan is planning to fail. I am certain you have heard that before, but it bears repeating, particularly after listening to the buyer of a multi million-dollar business, as he cried on my shoulder.

Strategic planning actions are well thought out, detailed actions. Nothing is left for chance. These strategies are laid-out timelines that allow you to take the right actions at the right times.

The use of a timeline allows you to focus only on the current action and not worry about future or past actions. Part of doing this is a skills assessment and resource analysis. You have to brainstorm every conceivable idea before putting it into your strategic plan.

If you have put the plan together properly, your strategic actions have a greater likelihood of success. These strategies should remain flexible. Review them weekly and then adjust them as the need becomes obvious. If you are reviewing your plan and strategies, then changing them as needed, you will achieve even greater results.

Part of your strategic plan will be the previously mentioned business dashboard. The strategic plan and dashboard will work hand in hand telling you how fast your are going, if your oil pressure is okay and whether you are over heating.