Three Steps to Ensuring Data is Meaningful for Your Business
Raw data encompasses the facts and figures that a business processes daily. Over time, every business accumulates a certain amount of data, which only becomes meaningful once it has been processed to add context, relevance, and purpose.
For example, in a restaurant, each order is recorded. However, the restaurant will gain little insight by viewing each order in isolation. Analysis of these orders, however, can reveal trends and patterns, such as peak dining days or the most popular menu items. A comprehensive understanding of the business arises from the relationship between these individual pieces of information. For instance, the restaurant owner may determine that the best day to place a substantial stock order is Wednesday, having analysed that sales increase by 38% on Thursdays.
In today’s fast-paced, technologically driven business environment, the ability to react swiftly to changing customer demands and environmental conditions is crucial. The capability to compile, analyse, and act upon data is increasingly significant. In some cases, a substantial volume of data must be accumulated and analysed before discernible trends and patterns emerge.
Without accurate business data, decision-making can only be based on gut instinct and assumptions about past performance, which is far from ideal for guiding future business decisions.
If your business is already utilising cloud software for accountancy, project management, or CRM, you may be sitting on a goldmine of data. When properly leveraged, this data can greatly enhance the operation of your business. You will gain valuable insights into your sales, expenses, profit margins, and staff efficiencies, which can help you answer critical questions and drive informed business decisions.
Every business is unique, but here are three essential tips to help you harness the power of data in your business:
Data is Only Powerful with Context – Consider These Questions:
- What is your primary objective (business or personal)?
- What is happening in the business?
- What isn’t happening?
- How can you influence outcomes by analysing and responding to your data?
It is crucial to first determine what you are currently trying to achieve. Periodically revisiting these questions and the goals that emerge from them is essential, as objectives evolve over time. For instance, while your initial goal may have been to run the best restaurant in your area, over time, your primary objective might shift towards taking time away from the business to spend more time with your family.
Ensure Your Data is Accurate and Properly Organised – Ask Yourself:
- Are your financial records up-to-date?
- Do you have any unreconciled transactions?
- Are you tax compliant?
- Are your staff trained on the systems and processes used in different parts of your business?
- Are your cloud systems being utilised correctly?
- Are you employing AI tools to analyse and respond to your data?
Attempting to analyse incorrect data and making business decisions based on it is highly detrimental. Tools such as Spotlight Reporting can assist in generating the reports necessary for informed business decisions.
Understand the Necessities and Niceties of Your Data:
- What is the most critical aspect you wish to understand about your business?
- Which figures indicate success for you?
- What are your objectives for the next six to twelve months, and the next two to five years?
Focus on what truly matters and build from there. If you require assistance with this process, we can help you accumulate, analyse, report, and advise on your data, or guide you on which tools to use.
