Three Steps to Small Business Analytics
Three simple steps will help you launch your small business now and far into the future
When your business is small, it can feel overwhelming to think about incorporating data and analytics into your priorities. After all, small businesses typically have limited resources, face fierce competition, and lack expertise in what may seem like ancillary functions such as analytics. However, the value of analytics for small businesses cannot be understated, as they lay a critical foundation for day-to-day operations and an understanding of growth. Additionally, in the early stages of a business, there are far fewer bad habits to break compared to companies that have rapidly grown without considering how they manage and leverage their data.
The following are three simple, fundamental steps that we encourage small businesses to take, which will put your organization on the right track and scale well with your growth.
Define Your Goals and Metrics:
Start by identifying your business goals. What specific outcomes do you want to achieve with analytics? Clear goals are critical not only for day-to-day operations but also for prioritizing your analytics efforts.
Once you have your goals in place, determine the key performance indicators (KPIs) that align with each goal. KPIs are measurable metrics that reflect your business's performance in relation to those goals. It is important to be very critical at this step, as it is easy to end up with a plethora of metrics that undermine your ability to focus on what truly matters.
At Sphere, we also encourage businesses to undertake the thought exercise of balancing measures. Balancing measures provide a way to holistically evaluate the effects of decisions and actions, helping organizations make well-informed choices that consider both positive outcomes and potential negative consequences.
Collect and Organize Data:
Efficient data collection is crucial for meaningful analysis. Identify the sources of data that are relevant to your goals and KPIs. This could include data from your website, social media platforms, sales records, customer relationship management (CRM) software, and more. As discussed in our previous post, in some cases, this may require data creation, but most small businesses have more data than they realize, and insights are just waiting to be discovered.
Ensure that your data is clean, accurate, and well-organized. Data quality is essential for generating reliable insights. Consider implementing data validation processes and regular maintenance routines. You may not feel ready to invest in a data platform or the data administrators and developers to run one. This is where finding a trusted partner like Sphere can be valuable, allowing you to tap into that expertise until the business has reached a critical mass where it makes sense to support it on your own.
Choose Analytics Tools and Techniques:
Select appropriate analytics tools based on your business's needs and resources. There are various tools available, ranging from basic spreadsheet software (e.g., Microsoft Excel, Google Sheets) to more advanced data analytics platforms (e.g., Tableau, Power BI). A core principle we adhere to at Sphere is to never encourage a business to invest in technology they don’t need. Sometimes, a screwdriver is better than a power drill.
Learn about basic analytical techniques such as data visualization, statistical analysis, and trend analysis. These techniques can help you uncover patterns, relationships, and opportunities within your data. Very few companies do this well, even large ones. Imagine the competitive advantage you can gain!
Remember that analytics is an ongoing process. Continuously monitor and analyze your data, and use the insights gained to adjust your strategies and tactics accordingly. As your business grows, you can explore more advanced analytics techniques to gain deeper insights and competitive advantages. However, for a small business, excelling at the basics can lead to substantial dividends.
—Derek Cyphers, Co-Founder and CEO
