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The importance of data for small business

According to techjury, there will be 40 trillion gigabytes of data (40 zettabytes) by 2020. Of this data, 2.5 quintillion bytes of data are produced by internet users each day. But why are these statistics important for small business owners? By using this data, you can create a more effective business that could make more sales.

Here are four reasons why data is important to small businesses.

1. Data helps to improve your decision-making

Whether your business has been operating for years or a month, you have data. This information can help you to make better decisions about your business. By looking at the data, you can see an accurate record of what goods are selling and which are slow movers. You can then see which to buy more of and which to put on special. You can also see when particular items are popular and how to stock more of them.

2. Data helps to improve your problem-solving

By reviewing your data after a campaign, you can see where there were hiccups in your process. By reviewing your team’s performance, you can see what they struggle with and work on creating an action plan to improve their skills.

3. Data helps to evaluate your performance

Have you ever felt disheartened after a bad month in your business? Have you ever wondered why you went into business because it doesn’t look like you making progress? By looking at your data, you can see how your business has been performing. You can see where you are successful and where you need to pay a bit more attention.

4. Data helps to learn more about your customers

Are you on social media? Do you have a website? By evaluating the information on these platforms you will be able to see who your key customers are? You may also learn more about what things they are interested in and when they access your page. This will help you to plan your marketing processes better.

Now, that you know the importance of data, there are two things that prevent people from using data. The first is not knowing what data they need to look at and the second is not being able to see the data in an easily comprehensible style. But here are three steps to understanding data better.

STEP 1:  Understand which KPIs you want to track

It is important to write down six to eight key performance indicators (KPIs) you would like to track. These KPIs should be in line with the goals you have for your business.

STEP 2: Collect and organise the data

You can manually collect and collate your data using excel spreadsheets or you could use online data visualisation programmes, like Databox. You could also find the information on data visualisations boards built into the programmes you use. If you use Hubspot as a CRM for your business, you can see the dashboard under “reports”. Most accounting programmes also have dashboards that show you how your business is doing financially.

STEP 3: Evaluate the data and implement new strategies

When you can see your data, you can evaluate it and see what changes you need to make to the various strategies in your business.

By getting in tune with the data in your business, you will be able to make more informed decisions to grow your business into the enterprise you have always wanted.

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