Businesses run on data and we live in a data-saturated world these days.
Even for those of us who are information junkies like me, there are days when it can be overwhelming.
Sales revenue, marketing costs, social media A/B split testing, cost of goods, lead conversions, email campaign bounce rates…the list of available business data is immense.
As small business owners, we have to figure out how to assess which data is important & useful, and which is not.
If we’re overwhelmed, the data we accumulate isn’t going to do us any good because we’re not going to process it effectively or use it timely.
Data vs. Information
Here’s the secret to surviving this mountain of data:
- Learn to distinguish between data and information.
- Identify the information that you need to run your business today and focus on getting that in a format you can use.
Every Business is Different
Even if they’re in the same industry, individual entrepreneurs run their day to day operations differently and will have various Key Performance Indicators (KPI’s) that tell them how well their businesses are running.
As an entrepreneur, the trick is to decide what your business’ KPIs are and focus on tracking and analyzing them regularly. Doing so will support better decision-making and promote your business’ success.
Identify the Information You Really Need To Know
Start with looking at the type of business you are in and assess the data what will help make it profitable.
- If you own a construction company, your ability to estimate, monitor and control job costs will be critical. What numbers do you need to track that accurately and timely?
- If you’re in Real Estate Sales, you’ll want to know how successful you are at converting new leads into sales and what the typical timeline is to do so. You’ll also want to know how much it costs you in time and money to close the sale.
- If you’re an online retailer, you’ll need to know how your website is performing:
- how do people find you, how long do they stay?
- how long does it take for your pages to load?
- are they new or repeat site visitors?
- how many pages do they view?
- do they buy or leave?
And that’s just for a start.
Customize Your Reports
As small business owners, we need to make decisions quickly, but effectively – which means we need clear and accurate information. Whether it is up to the minute sales reporting, current conversion rates on an online ad campaign we’re running or accurate cash flow forecasts, we need the information to be available and easy for us to evaluate while we’re juggling all our other responsibilities.
So identify your key information and design report that help you, as the business owner, to manage and make quality decisions.
These aren’t necessarily the built-in reports your accounting software will generate or that google analytics will supply. You’ll need to customize reports to your needs.
It’s well worth investing some time in this…it’ll save you time in the long run and make it easy to see what you really need to know.
This way you’ll also be able to spot opportunities and problems early. Old data isn’t much help in our rapidly moving business climate, so it also needs to be easy for you to access. Whenever possible, try to automate the report so you get it on a timely basis.