A lot of modern businesses make extensive use of business analytics. Especially for online companies, things like site traffic, bounce rate, and conversion rate are closely monitored monthly, if not daily. But for small businesses, data analysis for business is typically a low priority.
In an infographic by Longer Days on how small businesses spend their time on various tasks, only 2 hours are spent on “other marketing activities” including business analytics.
Similar studies also found the same trend. The Business Pulse Survey by The Alternative Board found out that small businesses do not spend as much time as they want on strategic planning.
Another study by Maven Link found that small business owners simply cannot find time to work on data analysis. They are struggling to juggle multiple jobs to keep up with the demands of their business. With owners taking 3-6 roles at once, it’s not surprising that business analytics is shelved in favor of jobs to keep the business afloat.
That is not to say small business owners are ignorant of the benefits of analyzing their business data for strategic planning. It’s just the matter of changing perception on the importance of business analytics for small businesses.
Here are 5 reasons why small business need to prioritize business analytics.
1. Business analytics shows your current standing.
Part of business analysis is gathering historical data. Past sales information, customer data, inventory, and other relevant areas are important for comparing how your business stands right now to where you were previously.
If you haven’t consciously noted historical data, sales information can be easily obtained through accounting records. If not, then you need to start doing so right now to provide a baseline for future business analysis.
2. Business analytics helps in setting and measuring business goals.
Identifying the metrics that you want your business to measure can help set the goals that you want your business to strive towards. It could be higher sales, new customer acquisitions, or your rate of repeat customers. These help measure your progress, and identify whether you’re meeting your goals or not.
3. Business analytics identifies opportunities.
By looking at historical data as well as competitor data, you can identify aspects of your business that may give you a competitive edge against rival businesses. It may be a business strength that you need to improve, a competitor weakness that you can take advantage of, or a new opportunity brought about by new trends in the market.
4. Business analytics leads to better business efficiency.
Efficiency is another key area that you can analyze. With business analysis, you can identify aspects that affect the time you spend on a business process as well as the costs attributed to it.
For instance, delays and rework are arguably the top issues of business efficiency. Not only do they affect the cost of the main project, there are also opportunity costs, such as lost revenue from other projects that could have been done.
Another aspect that could be analyzed is the organizational structure and overall business process. You can identify and streamline redundancies in operations and job tasks through business analysis. By minimizing time and financial costs and streamlining, you could have better business productivity.
5. Business analytics helps entrepreneurs make informed decisions.
In a nutshell, operating a business is just a series of business decisions. Especially for small businesses, decision-making can be a life-or-death situation. While gut feelings may have a place, it is better to base decisions entirely on historical data and statistical analysis to minimize risk.
Business analytics can give entrepreneurs the opportunity for smart decision-making. By getting access to relevant data, companies can make accurate decisions faster and more efficiently. Time is always a factor in business. To get ahead of a competitor, make your informed decisions with great timing.
With business analytics, you can stay ahead of your competition and give a better foundation to your marketing strategies. Start planning your print marketing strategy with meaningful business and customer insights.
Do you use business analytics in your business? Tell us your experience below.