A dynamometer is basically a tool to deliver an effective comparison or analysis of an engine output or performance. Dynamometers are a lagging indicator, which means the dyno only tells you what has occurred during the dyno run or test period. After you have applied your best engine building skills, the dyno serves the purpose of evaluating the engine's capabilities at a specified moment in time.
A dynamometer mainly measures Horse Power (usually at the crank shaft but in the case of a chassis dyno, Horse Power is only measured at the rear axle), torque, RPM range over which the engine was tested, temperature and air flow (volume and velocity of the air that ventilates the engine). Some dynamometers also measure noise levels of exhaust and intake manifold pressure, fuel flow, BSFC (the measured fuel flow in pounds per hour divided by the horsepower), and pressures such as oil pressure when appropriate.
Top racers own a dyno, as it is a very powerful tool. It provides valuable information about the performance of engines, transposed in a set of graphs. As dynamometers measure engine output, isolate and quantify the metrics of horse power and torque, they are very useful for elaborate performance tests. In preparation for performing a dyno test there are certain metrics that you should have or should obtain prior to planning the test. These include the minimum horsepower, the gear ratio if you are not attaching the water break to the output shaft of the motor. A good dyno allows the user to enter today's environmental or altitude conditions. When reporting, the software provides the correction factors so that each day is measured as though it were the same as the last time that the engine was tested or to a set baseline so that you always achieve a set comparison.
Dynamometers are very handy and useful, but they are a very expensive piece of equipment. Many of them are also extremely noisy, even when they are running on small motors. The exhaust is caustic and therefore, dynos should be used only in properly ventilated areas.
Before investing in a dynamometer, certain aspects should be considered, such as the size of the working space, the possibility of storing volatile fuels, or the access to certain utilities such as proper water supply for the water brakes. A computer and a color printer are also necessary for recording and monitoring the way the engine performs.
When the requirements are met, all it takes is ambition, dedication and investing the right amount of time for making refinements and adjustments.