Growing a startup is a tough task. Founders often deal with so many issues that finding time to measure the company’s traction can seem impossible. Business conditions change rapidly, and reacting to them successfully is a challenge – even if you know the metrics that matter most to you.
Conventional startup wisdom states that 9 out of 10 startups fail. One of the most common reasons for failure is miscalculating market demand for a product, with as many as 42% of startups failing for this reason.
The secret to a startup’s success is, of course, tracking progress. To deliver value to the market, startups have to measure every variable of their business and react quickly to trends.
Dashboards are pivotal tools in such an environment. The four dashboards described below make for critical starting points when keeping an eye on the trajectory of your business journey.
1. The Executive Dashboard
This is a high-level dashboard that reveals the bottom line facts about the business. CEOs and other high-level executives can use it to refine their pitch and track the value they’re delivering to the market.
While every company’s product and business model is different, some of the recurring items in these dashboards include annual recurring revenue (ARR), ARR per account, and customer retention.
Other metrics include customer growth and conversion metrics, such as lead to customer conversion rate. The executive dashboard collects data from departmental dashboards to present CEOs with insight into business effectiveness.
It’s very common to see financial metrics such as operating cash flow, working capital level, and interest expense numbers on there.
The idea behind this dashboard is to give the reader clarity into every aspect of the business, at a glance. It has to pull data from every database that the company uses as a part of its stack.
It might be tempting to include as many metrics as possible, but the objective is to reduce a business to the most meaningful KPI and evaluate whether unconventional strategies have to be adopted.
2. The Financial Dashboard
A company’s financial dashboard might come in one of many flavors. Its purpose is to provide the CFO and their team insight into how efficient and cash-positive the business is.
Startups routinely face cash flow problems, and a lean operation is essential for success. Every aspect of a business can be captured by a financial dashboard.
For instance, balance sheet dashboards provide real-time insight into balance sheet metrics such as cash, receivables and payables. Working capital levels are the most important component of this dashboard, since it defines how much cash a company can rely on in the short term.
Expense projection, meanwhile, is an important financial department task in any company. Matching projected budgets to actual spending is a key dashboard feature.
Often, spending is mapped as a percentage of projections. At the end of the month or any financial period, the company’s analysts and finance executives can view these percentages and use them to inform their projections moving forward.
Similar to the manner in which executive dashboards provide a quick summation of a business’s health, a financial performance dashboard can give the CFO a view of its financial health.
Metrics such as return on equity, return on invested capital, and the company’s debt to equity ratio capture the business’ important financial data.
By monitoring these dashboards in real time, investors and executives alike can understand where opportunities and risks lie.
3. The Sales and Marketing Dashboard
Sales dashboards are all about teams achieving their numbers. These dashboards represent a deep dive into the revenue figures recorded on the company’s income statement. The aim is to measure and capture sales team performance and project future business revenues.
Metrics such as ARR grouped by team member, new accounts, annual contract value, average days to close, and progress towards sales target help executives understand their sales cycles better. These dashboards also alert executives of changing business conditions.
For instance, an increasing average days to close number indicates possible cash flow problems down the road. Bulking up working capital to account for such problems is the typical business response. The sales dashboard also highlights the best and weakest performers on a team.
Companies can use them to improve their sales processes. An unusually low average progress towards goals indicates something going wrong within the sales funnel. Marketing and sales work in tandem, so examining marketing dashboards might unearth a reason for underperformance.
Metrics such as customer acquisition costs, the number of marketing qualified leads, and the number of new leads will help track marketing progress and the relevance of the company’s message.
In addition, paid ads performance, social media campaign performance, and other digital marketing-related dashboards will help a company figure out its best marketing channels.
4. The Customer Satisfaction Dashboard
While new customers are important for a startup, returning customers keep cash flowing in the business. Recurring revenue is an important metric that the customer satisfaction dashboard captures, along with customer churn rate and customer lifetime value.
Typically, these dashboards gather data from the company’s CRM database. Some companies even map these data to customer service metrics to create better customer responses.
For instance, metrics such as tickets opened versus closed, satisfaction percentages, and ticket resolution time can be mapped to marketing dashboards to determine whether the funnel has any leaks that need addressing quickly.
If you’re experiencing high churn rates, it doesn’t matter how good you are at acquisition – growth will stall. Customer satisfaction, then, is paramount for a startup’s growth, and this dashboard tells CEOs everything they need to know.
Better Visuals, Faster Growth
Dashboards are a great way of summarizing business data into an easily interpreted format. These four dashboards are the bare minimum a startup has to have to succeed.
While their formats might vary from one company to the next, tracking the metrics mentioned is critical. Without them, your business is flying blind.
