Many businesses have heard the buzz around business analytics. Terms like “data-informed” or “business intelligence” are everywhere, but for a small business, finding the right analytics can be a difficult process. While many software programs today store vast amounts of data related to your business, the data can be of low quality, irrelevant, or scattered across different systems.
As a small business owner, you may face similar hurdles. You might have access to data through software they use for other purposes, but these datasets can be disjointed, of low quality, and not be helpful in answering important questions related to your business. What steps should businesses take to unlock meaningful, actionable insights? Here are several strategic steps to get started:
1. Identify your questions: The first step in for quality data is to figure out what questions you need answered. This is the most important factor in determining what data you should be collecting to manage and grow your business. What are my customers’ favorite products? How much do I make for each of those products that I sell? Are there ways I can reduce my costs? Identifying these questions is the first step to ensure you are collecting meaningful data for your business.
2. Identify measures: Once you know the questions you are asking, think about what measures you need. What data do you need to find the answers you’re looking for? Don’t worry if you don’t currently have access to this data—focus instead on identifying the measures that can drive insights. Knowing exactly what to track is key to ensuring data-driven decision-making.
3. Determine Your Data Source: Now that you have identified your measures, you can begin formulating your data collection plan. This begins with identifying where this data will come from, or the data source. Are these measures available in the data you already have access to? If not, where will this data come from? How will you collect it? Knowing the data source is an essential next step in your data collection plan.
4. Set a Collection Frequency: Data’s value depends on its timeliness. Determine how often you need to collect each data point to make informed decisions. If you already have the data, evaluate how frequently it’s being updated. If not, set a collection schedule that ensures you’re gathering insights frequently enough to respond to market changes and operational needs.
5. Assign Responsibility: Assign someone to be responsible for overseeing this data collection. This person will be important to ensuring the data remains accurate, timely, and reliable—giving you the confidence to make well-informed decisions that drive performance growth.
With the right data strategy in place, your business will be better equipped to leverage analytics for competitive advantage and optimized decision-making.
