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 data to 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, and 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.