Value of Information

Valued information is any statistic that is available in your business that you 'value sufficiently' to trust and against which you make business decisions.  Many businesses get a monthly Profit & Loss and yet if there are no budgets against which to measure the month's performance, then what is the value of the information?  We estimate that less than 5% of owner managed businesses have any form of budgeting procedures. 

Then there are the other measures of performance that the P&L doesn't immediately reveal.  Things like conversion rates, production measures, stock turns, wastage and reworks, absenteeism and so the list goes on.  These are known as Key Performance Indicators (KPI's) and will vary from business to business.  What are yours?  Do you have budgets for them? Do you analyse them regularly to support the people in your business to make the correct decisions. 

Valued Information is the difference between an 'owner or family managed' business and a 'professionally managed' business?

Simply stated, it is the difference between the reliance on 'gut feel' and the availability and use of 'valued information' in making decisions to guide the business.