Forecasting trends, analyzing statistics with analytics software can drive small business success
Small businesses are always looking for ways to gain competitive advantage.
For many small businesses analytics represents an untapped opportunity to increasing their profits, growth and overall success. Analytics software identifies pertinent data and uses it to evaluate past and present performance in order to inform future strategy.
Despite how it sounds, it's not just for big businesses.
Small businesses and those catering to specific niche markets or groups benefit as well. Any organization that wants to better predict future trends is a potential candidate for a business analytics solution. Business analytics explores datato find patterns (this is called data mining), strives to explain why a certain result occurred, analyzes statistics, tests past business decisions and, based on data collected, helps forecast future trends and results.
Analytics in Action
Data related to the combination of products offered on a website can be studied to find useful patterns.
The frequency with which a prospective customer looks at a particular item can be tracked, as well as the ratio of how often a product was viewed in comparison with actual sales of the product. This kind of data will demonstrate how effective the product information has been in informing a purchasing decision.
To improve performance, even small changes to product combinations, placement, price or promotion can be implemented, and then tested against these indicators.
Four Tips for Getting Started
Several technology companies provide analytics software.
If you think analytics could help your business, here are four tips to help you get started:
1. Select a small number of metrics to track.
As data is managed and analyzed, the amount of data can be expanded. Too much data all at once can actually be a hindrance. The better approach is to start small, build up some successes, and then fine-tune the approach gradually.
2. Start with the types of analytics you need most
Then branch out into other helpful areas. These can include: cash flow, monitoring balance sheets, profit & loss, salary planning, project management, resource planning, marketing effectiveness and customer turnover rates.
Next- Getting started with analytics insights 3 and 4
3. The information analyzed should be available.
In both managed and informal reports, and be exportable in formats useful to your business.
Ideally, the data will be "modular," allowing the client to choose the segments and sections needed at any given time. It should be easy to parse for reports and to query and analyze, as well as readily usable for budgeting, planning, forecasting and visualizing new possibilities.
4. Finally, the data gleaned should be user-friendly, reducing the learning curve for the client.
This will facilitate rapid adoption and absorption, enabling the client to make the best possible use of the data. This is not data for data's sake; never lose sight that the ultimate goal of business analytics is growth, increased profits and sustainable success for your company.
In addition to monitoring trade and market news, a company selling products geared toward a specific market could monitor spikes or dips in sales around certain events, holidays or in the wake of media events. This data would then be analyzed and be used to guide future business decisions and improve sales.
Takeaway
Retailers can use business analytics to optimize sales in individual stores as well as at the regional or national levels.
The data can help identify trends in sales in particular geographic locations, perhaps even correlating these trends with specific seasons or times of year. This sort of analysis is only possible if data is collected from sales at all of the stores over a period of time. When used to manage inventories, specific metrics can help determine where certain product lines could be moved to sell at optimal times throughout the year.
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