Small Business Intelligence

Every business requires business intelligence, and business intelligence requires information that starts with raw data. Systematic data collection and data analysis are often ignored among small businesses.

It is not uncommon for small businesses to be three or more months behind in their accounting. Some businesses do not consider accounting a part of business management. A common misconception is that accounting applies to taxes alone; similarly, small business owners consider bookkeeping a non-essential duty, instead of a decision making tool. These misconceptions about financial data could cause you a lot of headaches, unless you understand the root causes of your business’ poor financial performance. Numerous business owners, like you and me, walk into a bank’s door to request a loan without having an updated set of financial statements, and very often they cannot even provide the valid reasons to justify a business loan. Such behavior and lack of information would make you look disconnected from your business. How can this happen to you when you are actively managing your business in excess of fifty hours per week? Maybe you are IN the business instead of MANAGING the business.

Business owners focus so much time on day-to-day operations that they can easily forget to collect valuable data from their existing customers. If you have growth aspirations, then you should not undervalue the data provided by your customers, since data will allow you to understand your customer’s buying habits, marketing mix, likes and dislikes and most importantly, the reason they buy from you and not your competition. Once you understand your customers, you will be in a better position to create new services and products, or to expand your business into new markets. Raw data can turn into valuable information, but only if it is well organized and analyzed; otherwise, it is just raw data.

A business example: Facebook used to have users switch between personal accounts and business pages, but since most of us started using multiple accounts and having multiple business pages the company built functionality to ease usability on Facebook for individuals as well as businesses. The customer feedback led to improved functionality and ultimately, an improved customer experience; which, at the end of the day, translates into more revenue.

Timely and reliable data allows you to make well informed business decisions; conversely, making business decisions without the facts provided by data could prove very costly. Every day, you make decisions that have an impact in your business’ future; consequently, when you do not have the right information, you are taking a disproportionate risk compared to the potential reward. Unfortunately, in the majority of cases, you will not know when you are making an incorrect decision until it is too late.  You could improve your odds just by having appropriate business intelligence. Data is everywhere in the daily operation of a business, it only needs to be organized and analyzed.  The value of business intelligence could make the difference between failure and success.