You know planning for the future is important if you want to stay ahead of the competition and ensure the success of your business. But in practice, making predictions and acting on them is difficult when your company isn’t set up to regularly and accurately analyse your data.
If you’re going to put data-based decisions at the core of your business model, you’ll need to be able to easily generate and analyse data quickly and accurately, whenever you need it.
And, most importantly, you’ll need to ensure that data-based smart decision making, where you utilise your business data, becomes the norm at your company.
And during this time of business uncertainty, with the coronavirus (COVID-19) outbreak having an impact, making educated business decisions could help your company move in the right direction.
Here are some tips to help you along the way, with expert input from Carl Reader, who’s a small business expert focused on enabling growth.
Tip 1: Shift your focus from data entry to data analysis
There’s one major factor that holds many businesses back from making more data-based decisions: data.
Ironic, isn’t it? You need data to make data-based decisions, but the act of gathering the right data and manually entering it into spreadsheets, forms and your accounting software takes so long that you end up never getting around to the actual decision-making stage.
Data entry slowly begins to steal large chunks of time, and you’re left with barely any time to actually analyse that data and make smarter decisions based on it.
That’s why this first tip is surprisingly simple but incredibly effective: automate as much of your data entry as possible.
“It’s complete madness for the business owner or finance professional to spend their time inputting data when technology can do it far more accurately,” says Reader.
The right software can automatically pull figures from sales reports, invoices and spreadsheets through to your accounts, reducing hours of data entry time and cutting down on human error in the process.
“Nowadays, the data can be in the system as early as the transaction happens,” says Reader.
“The time that was historically focused on going through receipts and managing purchase records, and so on, can be spent looking at that data and working out where next for the business.”
According to a recent report from Sage, small and medium-sized enterprises (SMEs) globally spend an average of 146 days and £49,000 a year on admin.
It’s clear that cutting down on that admin time with automation can have a significant effect and could really put you ahead of the competition.
When you’re not spending so much time typing in figures, you’re free to spend more time thinking about how those figures should impact your business decisions – while keeping track of user activity so you can see the benefits of streamlining tasks with easy collaboration.
Tip 2: Know when to delegate
Your colleagues might be enthusiastic about making more data-based decisions, but that enthusiasm could quickly fade if they don’t have access to the data they need to think and work more strategically.
“We’re moving to a more transparent society,” says Reader. “One in which data is more open and businesses of all shapes and sizes are letting their teams actually see what’s going on.”
Say a member of the sales team has a meeting in an hour and wants to present a report on how much profit a particular new product has generated, compared to the time taken to sell it.
“With a decent finance system, you can make sure that you’ve got access rights so that the right user can access the right data”
They’re forced to wait until whoever is in charge of accounts has time to pull the report, visualise the data, and send it across.
But by this time, the meeting has already taken place, decisions have already been made, and the accounts team has lost time they should be spending on their own strategic analysis.
There’s a reason why, according to marketing company Aberdeen, 70% of leading companies have some form of self-service data access.
“With a decent finance system, you can make sure that you’ve got access rights so that the right user can access the right data,” says Reader. “Look at building both the systems to prevent any issues together with building a culture of trust.”
The key is to give everyone easy access to the data they need, when they need it.
Many forms of accounting software, for example, will let you grant selective access to certain individuals for certain tasks.
That means they can upload the data that is required from them (such as their expenses) and download the information they need (sales reports, confirmation of paid invoices) without giving them access to the whole system.
With this access at their disposal, employees across the business can remove some of the burden of data entry from you, while getting the information and control necessary to really embrace data-led decision making.
Tip 3: Equip your team with the right technology
If only a handful of people are equipped and trained to compile reports, analyse data, and make decisions using that data, your efforts to make smarter decisions are going to be limited.
To have a real impact on the success of your business, data-based decision making needs to become part of your culture.
That means investing in tools that make data analysis easy, so it becomes second nature to check the figures before making any kind of strategic move.
“It’s vital to equip teams with the right technology,” says Reader. “Particularly considering the product developments that have been taking place and the fact it means technology can be used almost as another human nowadays.”
The right analytics software and dashboards tailored to your team members’ roles and job requirements will make it significantly easier for them to spot insights that others might have overlooked.
You’ll be able to train them to notice patterns in the data and use the insights they gather to make better decisions and improve the way they work on a daily basis.
When that’s happening across the whole business, it’s easy to see how these smaller changes can have a huge impact on the success of your company.
It’s easy to assume that there’s very little you don’t know about the ins and outs of your company.
But getting true visibility across your business and all the tiny factors that determine whether you stall or succeed can be hard.
For many businesses, the only way to get a clear picture of how they’re performing is to comb through reams of data by hand – bank records, invoices, purchase orders, sales figures, and so on.
“Technology frees up our real creative and intelligent sides,” says Reader, “as opposed to performance being a measure of how quickly we can move our fingers around a keyboard.”
Tip 4: Make better use of dashboards and key metrics
Your business generates huge amounts of data every week.
How do you make sure you’re taking all of the important factors into account when you make a decision, without having to spend hours and hours every day hunting through hundreds of figures?
The right business reporting solution can make the whole process of compiling and analysing relevant data much more straightforward.
Just identify the key metrics you need to make the decision in question, and your software will do the legwork of fetching it and presenting it on one dashboard.
“These dashboards and reports actually translate that data into indicators that are easily understood, which teams can act on. It’s game changing for any business”
With all the relevant information displayed in one place, in a format that’s intuitive and simple to interpret, you’ll be able to make fast, informed decisions.
This also makes it easy to justify and explain the rationale behind your decisions to stakeholders – just pull up the dashboard and talk them through your thinking.
“It’s absolutely revolutionary,” says Reader.
“We’re in an age now where the data and the reports that were once only available to massive corporations provide businesses with more than just a list of numbers and words.
“These dashboards and reports actually translate that data into indicators that are easily understood, which teams can act on. It’s game changing for any business.”
Tip 5: Tailor your reports to your needs
Most small businesses recognise the importance of data and data analysis in decision making. But many of them start out like data magpies, collecting anything and everything that looks interesting or that might be useful later.
The key is to ask yourself one question: what do I need to know right now in order to make my business a success?
“The reality for business is that a focus on the key drivers in the business creates success,” says Reader. “You don’t make a business successful by focusing on the 99th most important thing in your profit and loss account.”
By building personalised and custom reports, you can select the data that allows you to find the answers you’re looking for.
And by being able to generate reports easily and at any time, you can give yourself a clear picture of where the business stands.
For example, it might make sense to have a quick daily overview of your sales, so you can check you’re on track for your monthly targets.
Or you might want to see how the uptake of your new product has progressed over the past month and try to understand why demand spiked on a certain day.
“A dashboard absolutely has to be adapted to the needs of the business,” says Reader. “The finance department needs to consider how people digest information.
“Is a graphical format better? Is a traffic light system better? Do key numbers work better for them or do percentages work better for them? Because we all have different ways of being motivated.”