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David and Goliath
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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: At-A-Glance Financial Information

This is the third post in my series on communicating with your board.  You can find the previous posts here and here.

Consolodating key financial information on a single page is a great tool for communicating some of the most important data about the company in a quickly-grasped snapshot.  Because of this, it’s not only good for your board, but your employees as well.  Presenting the data this way makes it much easier for an audience to understand the financial health of the company without pouring over the complete set of financial statements.  It also gives you the chance to make clear to your audience what you believe are the highest priority financial metrics for the company at any time.

Creating such summary information doesn’t let you skip the troika of financial statements (P&L, balance sheet and statement of cash flows), but it’s no additional work either – another page in your spreadsheet refering to data in the complete statements almost always does the trick.

While the exact format of such a one-page statement should be discussed with your board, the format below describes one that is used in a company that I work with, proposed by another director.  I’ve come to like it a lot and always keep the spreadsheet on my desk a few days before and after the respective board meeting so I can quickly refer to it as I think about the progress of the company.  It has three sections:

  1. Finance
  2. Headcount
  3. Subjective updates that either have an impact on the current period or will likely have an impact on future periods

I’ll go into each one separately . . .

Finance

As is true for much of the operating life of companies, the focus should be on cash.  As such, you should list the key spending areas of the company – the big line items – and sum them up to come up with the gross burn rate for the previous period.  As I mentioned in my previous posts in this series, it’s good to have numbers for previous periods as well.  You should include the last two (for a total of three) to five (for a total of six) months as a minimum in this table.

Once you’ve established the gross burn, you should summarize any cash infusions into the company.  Generally speaking, these will only include a few line items, like investment income, financings and collections.  By subtracting this sum from the gross burn, you’ll derive the net burn for the company.  Again, this should be reported for the previous months as well.

In this section, it’s also a good idea to list the key balance sheet entries and any bookings numbers (so the forward potential for revenue is observable).  For the balance sheet items, I like to see accounts receivable, accounts payable and any deferred revenues.  Of course, given the structure of the company and accounting methods, other data may be important in this section.  Capital equipment should be included if you’re running a business that requires a lot of it.

Finally, for bookings, you should list the bookings for the previous month, quarter and year-to-date.  It’s also a good idea to list the similar data for comparable periods a year earlier.

Headcount

In this section, you should summarize headcount by department.  There is no reason to break your small company into too many small departments here, you can simply lump them together by function if departments don’t work out.  In the cart, you should list the actual headcount as of the time of the last report, any additions or deletions since then and the current headcount.  You should also list the headcount plan per department and indicate any delta between the numbers.

Updates

Finally, you should add a few lines of important data that either had an impact on this current summary or will ikely have an impact on future performance.  Items like tax filings, lawsuits, delayed products, loans being called, key people leaving or being hired, etc, should be listed here.

So, in the end, the consolodated report will look something like this (Google Spreadsheet):

Again, it’s short.  At the most, it should cover a single page.  It’s also easily derived from the financial statments that you already have – your spreadsheet editor will do all the heavy lifting.  In the end, it will improve communication with your board and your company and it will help to make sure your board is up to speed at all times.

I’ll state again that you should discuss the format of this type of information with your board.  It doesn’t make sense to present a summary that doesn’t fit the specific needs that the group has and the format can be easily changed to make it work well.  As Chris Wand over at Ask The VC says in his recent post, Concluding Thoughts About Good Board Packages,

While it’s tempting to look for an example of a “perfect” board package and then replicate it, the perfect board package isn’t something that can be easily copied because it’s company specific and requires a thoughtful case-by-case approach.

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  • Dave

    A 13-month version can be very nice. It’s enough to see trends and also compare directly against same month last year. I used to do two versions of this, one with current quarter, then other quarters this year, then YTD; and the 13-month version. You use them for different things.

  • Dave

    A 13-month version can be very nice. It’s enough to see trends and also compare directly against same month last year. I used to do two versions of this, one with current quarter, then other quarters this year, then YTD; and the 13-month version. You use them for different things.

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