Importance Of Data In Your Business

What does the information collected from all your business processes say about your business?

Is your business efficient?
What are you wasting money on that could be better spent on something else?
Who on your sales team are underperformers?

After incorporating a business, owners tend to get so stuck in the mode of doing business, that they don’t take the time to understand the vital information that illustrates the performance of their business. They don’t see the importance of data in your business.

Are You Even Aware Of Your Business Information?

If not, you may be running a business that isn’t even healthy. The data collected on your business acts as a check up, alerting you to what needs to be tended to immediately.

Consistent data collection is vital to a business because it communicates the ongoing performances of that business. The performances being tracked help to demonstrate where a business is currently at and where the business will be positioned in the future, based off of information being gathered. For this information to be gathered and known, your business needs to have a database system in place that manages information related to your various business functions.

Related: How to Protect Your Data Online: 5 Safety Tips for SMEs

Do The Majority Of Business Owners Even Actually Know What A Database Is?

More importantly, do business owners even understand why a database is needed for their business?

Databases are a collection of organized information that can easily be accessed, managed and updated. Database systems are very important to your business because they communicate information related to your sales transactions, product inventory, customer profiles and marketing activities. Without you having a centralized place to store all this information, you have no clue what is actually occurring within your business.Without knowing the actual details of your business, business owners make assumptions, and assumptions are usually based upon opinions rather than facts.
Databases help to make your business stronger, raising your ability to increase your profits. You have to know how your business processes are working. Are they working together to create a successful business, or are they working independently, not supporting each other?

The data of your business processes have to be known. You could be operating and making mistakes that are costing your business a lot of money. I will provide you with some examples as to how this happens.

You see that your business has high sales transactions, bringing in high revenue, but you are losing money, rather than gaining money. You don’t understand why this is happening. Reading through your business’s data, you see that you are selling too many low-end products and services. While these items bring in revenue, they have to be sold in mass quantity to positively affect your business. You are a small business, not Wal-Mart, you have to focus on quality, rather than quantity. Its Important to inform your sales team that they need to focus on selling on mid-level and high-end items. Sell less of these items, but still triple the revenue you are currently making, which leads to making a profit.

If you are spending a lot of money on Facebook ads and Google ads, but are seeing a good return on your investment? You have spend hundreds of dollars per month, only seeing a few leads come your way. You are frustrated and want to know what the issue is, you can’t afford to keep spending this type of money, not even making it back. Finally reading through the data collected, you discover that your ads had no specific demographic targeted. Instead of the people you wanted as customers clicking on your ad, a wide range of people, who will never be your customer, were clicking on your ads. You correct your mistake, allowing you to reduce the money spent on ads, while bringing in leads that could actually be converted into customers.

You notice that your business is having trouble bringing in high in clients. Your services are specifically focused on this market, but they don’t even notice your business. After looking through your data, you see that your pricing reflects that you are focused on lower end clients. By trying to be affordable, you excluded the market that you created your business for. This market wants experiences, not just convenience. You alter your pricing and begin to focus on communicating the value your business provides, rather than on the benefits of your products and services. 

Now do you see why it is so important to know the data within your business? Just being knowledgeable of about what is going on within your business can help you correct issues before they escalate out of control.

Related: Rikvin’s Company Stats for February 2016 

Input Data In Database System

For those business owners who do input data within a database system, the systems that you may be using include: Office Excel, Constant Contact and Office Access, Google Drive, and Quickbooks. You can quickly input information, and keep track of your daily activities, monitoring the progression of your business. These database systems are ideal for small sized operations. But as a business’s operation grows, its processes and information become more complex, and the management of the database system becomes too difficult to administer in house with these basic management platforms.

As a business’s database system grows, it becomes a wise decision to outsource the database’s management to a database administrator expert. A DBA is an individual trained to effectively integrate your business’s processes within a manageable system, making it easier for a business to enter and track the important information regarding its day to day business operations.

As a big business, you have too many people and too many activities to keep track of. You have employees to manage and customers to support. Your marketing activities are amplified and large money transactions occur throughout the day. Quickbooks and Constant Contact are not going to effective in this large scale business operation.  This now has to be outsourced to professionals, who specialize in handling this large volume of information.

Related: How Your Company Can Obtain Accounting Software At A Bargain in Singapore

Sensitivity Of Business Information

Another reason why database administrators are important is because a business’s information is sensitive, meaning it should not get into the hands of the wrong person. For example, if your business were to have a data breach like Target experienced, would it be able to survive the hit and resulting criticism? Most likely not, so it is a must that a business hires a professional that can keep their data safe as it grows in size and complexity.

Imagine if your business were to have the credit card information of customers stolen. You don’t have a team in place to handle the PR related to that situation. Your business is are not large enough to handle the decrease in customers as they wait to see how the situation plays out. Your business is too fragile to absorb this type of blow. That is why your data must be secured.

Your business’s data is an indicator of how well your business is performing various functions of your business. Therefore, it is important to have your business’s data well maintained within a database system that can effectively position your business for continued growth, by keeping you constantly aware of how well your business is functioning. Knowing the constant status of your data is a competitive advantage because you actually understand your business and how to make it better.

If you aren’t doing so now, become aware of your business’s data so that you can know your business’s real health. Ensure that your business is positioned to make you money, not cost you money.

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