Most entrepreneurs think that ‘fancy’ technological innovations like AI or Big Data are only meant for million-dollar businesses. They are led to believe that small businesses should only stick to traditional means of growth. They couldn’t be more mistaken. No matter how small your company is, tools like data management can help you reach your true potential faster. Small business growth is all about maximizing every single advantage, and there is no greater advantage than your data.
Still not convinced? Then here are five reasons why data management matters for small business growth.
#1 Big or Small, Data is Always Useful
A common misconception regarding data management is that you need vast amounts of data to even begin taking advantage of data management techniques. This is not true.
In this digital age, even if your operations are pretty small, they still collect more than sufficient data about various aspects of your business to be able to glean useful insights.
Consider a standard warehouse system. Commonly, inventory management and stocking are done reactively; orders are placed as a category of goods is running out, with about the same standing quantities of each variety maintained. By managing your data better, you can make this system far more efficient.
While there are many factors for proper inventory management, it boils down to this:
- using your data to anticipate your stock requirements
- cutting down on the inventories of goods that data shows to be unlikely to run out
- loading up on items that might see a higher than usual demand.
Even if you don’t sell physical goods, other assets like your employees, your projects, etc. can all be managed more effectively by learning from data.
#2 Marketing is Driven By Data
There are two ways of approaching marketing.
One way is to borrow from current marketing fads and put out efforts into every possible channel, some of which might stick.
The other is to build on the information you have, taking into account your target demographic, their needs, and what has historically worked for your company. Then you move forward with this knowledge.
Needless to say, the second option is much better. Not only does a data-informed marketing campaign brings you better results, but it also saves expenditure by clearly identifying the approaches that the data shows to be worthwhile.
Properly managing your data also gives you a metric to measure up your marketing efforts with.
Marketing can often seem like a hit-or-miss activity, with tangible victories hard to come by. Analyzing the data of your sales (and queries) can help you build a better picture of how exactly each of your marketing initiatives is helping bring in more customers.
This, in turn, allows you to approach marketing with clear performance indicators and achievable goals.
#3 It Helps You Understand Your Customers
This is one of the most important aspects of data management. For any business to thrive, it needs to understand what their customers want and provide it to them before they think of looking for a competing service.
This is also one thing regarding which you already have more than enough data. A company of any size always keeps records of every sale made, whether it is B2B business or an e-commerce website.
On the surface, these records are nothing but dry history, useful for calculating profit margins.
But this data is a treasure trove. Because it is within these sale transcripts that you will find an idea of your customers’ spending habits and product requirements, and more importantly, their expectations.
- Which kinds of products see more repeat customers?
- Which period of the year is the leanest period of sales, and what are the products that sell the best in that period?
- How many of your customers seek refunds, and how many of them continue to remain loyal customers after their grievance is redressed?
These are just some of the questions that can be answered by looking at your past data and analyzing it. And every one of them gives you valuable insight that can help you grow your business.
#4 Data-Driven Decision Making is the Way Forward
Let’s face it; decisions that come from ‘instinct’ (or the gut, as some like to put it) seldom work out that well. It is like shooting arrows blindly – one or two might hit, but it is luck more than skill that counts.
By paying heed to what your data tells you – there is an uptick in sales before the holiday season rolls in, or new product launches do better when they do not draw comparisons with competitors – you ensure that you always put your best foot forward.
And this extends not just to broad insights. Hard numbers are even more important for day-to-day business decisions. Measurable data like KPIs (Key Performance Indicators) are crucial for setting business goals and understanding how you have to go about achieving it.
#5 Data Analysis is Easier Than Ever
There was a time when making sense of data needed expensive software and a dedicated team of professionals speaking in complex technical terms.
But with the advent of low-cost data analysis tools and freelance data scientists well versed in them, data analysis is more accessible than ever before.
And you need to analyze your data. Data analysis turns your unmined data into gold by extracting useful information and collecting the key indicators pertaining to your business.
Once analyzed, this data can then be presented visually as well, from which you can easily derive more substantial insights and act upon.
Many people think that business breakthroughs come from pure genius. In truth, companies grow by paying attention to the small details and winning the everyday battles that put them ahead of their competitors inch-by-inch. And as everyone knows, being informed is winning half the battle.
By properly managing the wealth of data your organization produces daily, you can put yourself on a trajectory that takes you to the top.
Data management gives small businesses the edge needed for rapid growth, outpacing rivals that fail to take advantage of the data-driven insights at their fingertips.
Heather Redding is a content manager for rent, hailing from Aurora. She loves to geek out writing about wearables, IoT and other hot tech trends. When she finds the time to detach from her keyboard, she enjoys her Kindle library and a hot coffee. Reach out to her on Twitter.