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The Silent Man
5 of 5 stars
Another great John Wells book. I previously compared Alex Berenson and his hero, John Wells, with Vince Flynn and his troubled CIA agent/assassin, Mitch Rapp. Towards the end of Flynn's short life and in his final Rapp books, Flynn got a...
tagged: fiction and troubled-assassin
Getting Started with Hobby Quadcopters and Drones
2 of 5 stars
When I was looking up reviews of drones on the web, I found several mentions of this "book" (a pamphlet,really). It's OK,but all the information can be easily found elsewhere online. The repeated warning about crashing your drone and sta...
tagged: non-fiction
The Martian
5 of 5 stars
Wow. Just . . . wow. This was one of the most entertaining books I have read in a long time. The story is fabulous and the execution wonderful. Basically a diary of an astronaut left behind in an escape from a failed Mars mission (though...
tagged: fiction
The Target
2 of 5 stars
I can't even begin to imagine why this book has gotten good reviews. I have read and enjoyed Baldacci's books before, but this is the first book in the Will Robie series that I've read. Probably the last as well. It's the third one of t...
tagged: fiction and troubled-assassin
David and Goliath: Underdogs, Misfits, and the Art of Battling Giants
3 of 5 stars
I didn't love this book. While I generally like Gladwell's style and analysis, he seems to be running out of interesting observations or topics to cover. There are a few good tidbits and the book is short. If you love Gladwell, it's wor...
tagged: non-fiction
Anthem
4 of 5 stars
I love Ayn Rand's thought-provoking books and stories. I'm fundamentally aligned with her libertarian way of thinking so, for the most part, her stories are just one's that drive home a point that I already agree with or, at least, under...
tagged: fiction
Thinking, Fast and Slow
5 of 5 stars
This is simply a fabulous book about how the mind works and how our behavior is driven by our levels of thought. It's not a terribly difficult book to get through, although it does require a lot of System 2 thinking - Kahneman's term for...
tagged: non-fiction
Killing Jesus: A History
4 of 5 stars
As with the other "killing" books by Bill O'Reilly and Martin Dugard, I really don't like the positioning that the book is based entirely on fact - insinuating the other crappy books I've read are made up. In the documenting of Jesus' li...
tagged: non-fiction
Wooden: A Coach's Life
4 of 5 stars
How can one not like a book about John Wooden? The man is a sports icon. Most of all, of course, he's a teacher, which is exactly what he wanted to be and prided himself on. He based his entire life on teaching basketball fundamentals an...
tagged: non-fiction and sports
Dead Eye
5 of 5 stars
Wow. Just. Wow. This is a great book. In the ex-CIA-troubled-assassin genre, this may be my favorite book ever. Greaney does a fabulous job of balancing action with storyline. Never gets boring, but the reader is overwhelmed by ridiculou...
tagged: fiction and troubled-assassin

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Communicating with Your Board: Sales Numbers

I’ve mentioned before that it’s likely that your board remembers less about your business between meetings than you think.  As much as you think that your business is the most important thing in the world to them, your directors are probably on more than one board and many are on several at any given time.  So, with all the various pieces of information they are dealing with, they may not remember everything or sometimes get some facts and figures mixed up between companies.  As such, it’s important to remind your board about the relative nature of what you report to them each time you give them updated information.

What do I mean by this?  All information, especially numbers, should be given in context.  When new numbers are being reported, they should always be linked with plans, forecasts, and previous results.  As always, any communication tool that’s good for your board is likely to be a good one for the company in general, allowing people less familiar with the inner workings of the day to day business to grasp the significance of the data being presented.  You shouldn’t have to do a lot of extra work for your board, but you may want to consider the presentation of data with the board’s unique circumstances in mind.

In this post, I’m going to give some examples of how to report sales numbers.  The problem with sales reporting is that they come in multiple forms and have to account for many components.  There are planned, forecasted and actual sales.  Sales by territory and by channel.  There are sales by product and service and, further, by product line or service area.  There are probably half a dozen other ways to cut the numbers as well.  The goal is to put as much of this data into as condensed a format as possible.  Here are some charts that do that.  Please excuse my obvious US territory bias in these charts.

 Territory  Q1 Plan  Q1 Actual  Q2 Plan  Q2 Actual  Q3 Plan  Q3 Actual Q4 Plan  Q4 Actual  Year Plan   Year Actual
 US East                    
 US Central                    
US West                    
 Asia                    
 Europe                    
                     
 Totals                    

The rows in this chart obviously represent each territory that you sell into.  The columns give a view of the plan, presumably set before the period and likely before the year began, and the actual data for completed quarters. If a quarter is not yet over, you can use “actual” column to show the results of the quarter to date.  If you run your business on periods other than quarters, you can, of course, change the headings of each column to whatever period fits.

Presenting the data this way gives the reader a full view of where you are, where you were planning to be and what the future should look like.  If you adjust your plan during the year, you can, optionally reflect it here or on a chart that compares the old and new plan.  Too often, the old goals are tossed when a new plan is adopted.  In my mind, this is an error because the original numbers are too quickly forgotten.  You can’t learn from or remember why the plan changed if it is left in the dust.  It’s good to reflect on the original plan after the individual periods and the year is over.

Many companies sell their wares through multiple channels.  Ideally, this would be another dimension to the report above.  Since that presentation is difficult, though, we have to settle for an additional chart in which we break down the numbers by channel.  The chart looks just like the one above with “channel” replacing “territory.”    Of course, you may need to further break down each channel by territory.  I leave this extrapolation to the reader <g>. Again, showing plan vs. actual both forward and backward in time is critical to understanding the meaning of the data.

The final use of the basic chart outline above is for product line reporting.  For this, “product line” replaces “territory.”  While small companies will not always break down bookings per product line (although they should as soon as it’s applicable), it’s a good idea to separate product and service sales very clearly.  This basic division of numbers (which will probably also be found on the P&L) tells a lot about the business.

Forecasting sales is fundamental to making good investment decisions inside a company. If you don’t know where and when revenue will be coming in, you won’t be optimizing your use of capital.  Forecasts can come in many forms, but should at least include the following information:

 Customer Territory   Pipeline Stage  Expected Close Date  Sale Value  Prev. Close Date
           
         Total  

For more information on the “pipeline stage”, see my post here.  The “expected close date” is the currently forecasted date for closing the deal and the “sale value” is the total bookings expected for this sale.  The “previous close date” is a very important part of the forecast.  It tells the reader that this sale was previously forecasted to close at another time.  Like the other charts, any data on what should have been or what will be substantially increases the value of any data being given.  Without this, there’s no accountability for the forecast unless the reader remembers the previous forecast or asks further questions about every deal.

The final sales-related chart that I like to see as a board member with a failing memory describes the deals that took place during the previous period.  These are deals that closed and the company reported as a booking.  A chart like this one contains all of the critical information.

Company  New  Add-On  Renewal  Total
         
         
   Total  Total  Total  Total

Here, the closed deals are listed by company name and amount with whether the deal was the first sale into that customer, an add-on to an initial deal or a renewal of a subscription-based earlier sale.  Obviously, the terms aren’t important, but any concept that applies to your particular business is.

  • A new deal is just that, a first sale into that particular customer.  Whether you include different divisions of the same company as the same customer is up to you.
  • An add-on deal is where you’ve sell additional product or service into a customer as a follow-on to an original deal.
  • A renewal happens when either a time-based license is renewed or, perhaps, a service agreement is extended.

These charts can usually be condensed into a few pages.  Small companies with a handful of deals will probably even be able to get them all onto a single page (aside from the huge forecast that might take additional volumes <g>). 

Of course, these are just examples and they may not all completely apply to your business.  They represent the way that I have seen reporting done successfully and in a compact form.  You should discuss the representation of information with your board and decide on the best way of getting comparative data communicated.  I highly urge you, though, to find a way to not only show current period data, but to do so in context, showing comparative data for other periods and versus plan as well.

  • http://www.blackstoneassoc.com/ Andy Blackstone

    Not just for the board – this is thinking and organization that should be done internally on at least a monthly basis. Without it, you’re in danger of believing your own BS. It’s also easy if you’re using any of the good CRM systems – just design the reports and run them when you need them.

  • http://www.blackstoneassoc.com Andy Blackstone

    Not just for the board – this is thinking and organization that should be done internally on at least a monthly basis. Without it, you’re in danger of believing your own BS. It’s also easy if you’re using any of the good CRM systems – just design the reports and run them when you need them.

  • http://www.2-speed.com/ Will

    I totally agree, Andy. There are plenty of companies that don’t do any reporting and some that report the numbers without context making it convenient to interpret in any way you’d like – galss half full or half empty. measurement has no value if you don’t know what you’re measuring against.

  • http://www.2-speed.com Will

    I totally agree, Andy. There are plenty of companies that don’t do any reporting and some that report the numbers without context making it convenient to interpret in any way you’d like – galss half full or half empty. measurement has no value if you don’t know what you’re measuring against.

  • Pingback: Bored? Let’s fix it! » Improving the Presentation of Sales Information to Your Board [pascalsview]

  • Pingback: Communicating with Your Board: At-A-Glance Financial Information « 2-Speed

  • Pingback: Communicating with Your Board: The Summary « 2-Speed

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  • http://www.financialspreadbettingsystem.co.uk financial spread bet

    “board remembers less about your business between meetings than you think”, and I don't think it remembers a lot at the best of time so it must be bad.