Data visualisation

Why it matters

The people who need to act on your numbers are busy, and many of them are not comfortable with spreadsheets. A clear chart lets a site manager see in two seconds that one job type is losing money, where a table would have been skimmed and forgotten. Good visualisation is also a defence against your own bias: a trend line over two years is much harder to argue with than a memory of last month, and a bar chart of margin by product has ended more than one owner's attachment to a favourite line.

Start with the question, then pick the chart

Almost every business question is one of a few shapes. Is it going up or down over time? Use a line. Which of these is bigger? Use a bar chart, sorted. What is this made up of? Use a stacked bar, or a bar sorted by size; avoid pies beyond three or four slices. Where does this stand right now? Use a big number with its comparison. Do these two things move together? Use a scatter. Does the reader need exact figures? Use a table.

Choosing this way removes most bad charts before they are made. A pie chart of monthly revenue over a year is wrong because the question is about change over time, not composition. A line chart of margin by product is wrong because the products are categories, not a sequence.

A bar chart in practice

A sorted horizontal bar chart is the workhorse of small business reporting. It handles long labels, it reads top to bottom like a ranking, and the order itself carries the message. The figure below shows revenue by channel for a quarter: the shape says immediately that the business lives on repeat customers and referrals, and that social media is a small contributor despite the time it takes.

Notice what the chart does not have: no 3D, no gradient, no legend, no decimal places. The values are shown on the bars so nobody has to read an axis. The only colour decision is whether one bar needs highlighting because it is the point.

Habits that help and habits that mislead

Charts mislead more often by accident than by intent. A bar chart whose axis starts at 90 instead of zero makes a 3 per cent difference look like a collapse. A line chart with no comparison period makes normal seasonality look like a trend. Two charts side by side with different scales invite a false comparison. None of these are lies, but all of them lead to the wrong decision.

The honest habits are simple. Start bar axes at zero. Show the same period last year alongside this year. Label units and dates on the chart itself. Keep colour for emphasis. Put a one-line title that states the point rather than the data: "Retaining walls earn half the margin of maintenance", not "Gross margin by job type".

Designing the page, not just the chart

A report is read in a sequence, so arrange it the way the reader thinks: the overall result first, then what drove it, then the detail for anyone who wants it. Three or four charts on a page is plenty. Each should answer one question and have a title that states the answer. Tables go at the back for the people who want the exact figures.

Consistency matters across pages and months. Use the same colour for the same product or site every time, the same order of categories, the same chart for the same question. Readers learn the layout and start reading the numbers rather than the design.

How to make a chart that lands

1. Write the question in one sentence What does the reader need to know? If there are two questions, make two charts.
2. Pick the chart from the question Time means line; categories mean bar; composition means stacked bar; status means big number.
3. Sort and simplify Sort bars by size, group small categories into "other", remove anything under a few per cent of the whole unless it is the point.
4. Start the axis at zero and add the comparison Last year, target or budget on the same chart, same scale.
5. Strip the decoration No 3D, gradients, gridlines you do not need, or legends when direct labels will do.
6. Title it with the point A sentence a reader could repeat in a meeting without looking back at the chart.

Real-world example

A Perth landscaping company redraws its monthly report

Swan Valley Landscapes has 14 staff and a monthly report that nobody but the bookkeeper reads: a 3D pie chart of revenue split across eleven job types, a forty-row table of jobs, and a line chart of a single month's daily takings. The owner, Marco, rebuilds it around three questions. Are we ahead of last year? Which work makes money? Are we going to be short of cash?

The new report has a line chart of monthly revenue with the same month last year beside it; a sorted bar chart of gross margin by job type, which shows maintenance contracts at 46 per cent, planting at 38 per cent, paving at 27 per cent and retaining walls at 19 per cent; and two big numbers, cash in bank and debtor days, each against last month. The margin chart is titled "Retaining walls earn less than our overhead rate", because at 19 per cent they do not cover the business's roughly 24 per cent overhead. For the first time his supervisors ask about the numbers in the meeting, and retaining walls are re-quoted with a higher labour allowance from the following month.

Common mistakes

• Choosing the chart from the menu A pie for a trend or a line for categories confuses the reader. Decide the question first; the chart follows.
• Truncated axes A bar axis that starts above zero exaggerates small differences. Start at zero, always, for bars.
• Pies with many slices Humans compare angles badly. Beyond three or four parts, use a sorted bar chart.
• Decoration over data 3D, gradients, shadows and heavy gridlines distort sizes and hide the point. Remove them.
• Titles that describe rather than conclude "Revenue by month" makes the reader do the work. "Revenue is 12 per cent ahead of last year" does it for them.

KPIs to track

• Charts per page Three or four is enough for a management report. More usually means two reports have been merged.
• Time to the point How long a new reader takes to say what the chart shows. Aim for a few seconds.
• Questions asked in review Good charts provoke questions about the business, not about the chart. Count both.
• Consistency across periods Same chart, same colours, same order every month, so readers learn the layout.

Frequently asked questions

When is a pie chart acceptable?

When you are showing two to four parts of a whole and the point is that one part dominates. For anything finer, a sorted bar chart is easier to read accurately.

Should I use a line or a bar for monthly figures?

A line if the point is the trend over many months. Bars if you are comparing a few periods, such as this quarter against the same quarter last year, where each period is a distinct block.

Do I need special software to make good charts?

No. Spreadsheet software makes every chart in this article. What matters is the choice of chart, the sorting, the axis and the title, all of which you control in any tool.

How do I show a target on a chart?

Add it as a flat line on a time chart, or as a marker beside each bar. Keep it the same colour every month so readers recognise it instantly.

Key takeaways

• A chart exists to make one point obvious; if the reader has to study it, it has failed.
• Choose the chart from the question: time, comparison, composition, status, relationship or exact values.
• Sorted bar charts with values on the bars handle most business comparisons.
• Start bar axes at zero, show the comparison period and strip decoration.
• Title every chart with the conclusion and keep the design consistent month to month.