Small Business Tips: Why Data Matters to Bad Credit Businesses
Damaged credit represents a serious issue for small business owners who are in the midst of expansion, as it has the potential to bar them from the most obvious sources of external working capital. What this more, it transforms the capital that they are able to get access to into much more of a precious commodity. Before a business is able to move forward with expansion with the extra consideration of bad credit, the owner of the business needs to take steps in order to mitigate the risks of deploying capital. The best made investment plans account for the projected ROI of the investment, and so should the plans that you have for investing in your business. But how can one know if the investment they have planned for their business will be profitable? The surest way is to look at what has worked for you in the past as well as conduct market research for the future.
Your business’s data is one of the most important assets you possess. What your data represents is the record of what your business has accomplished to this point, and more importantly, how it has accomplished it. A word of warning to those who are going to start looking at their data, however. Looking for trends in data is different than attempting to apply trends to data. If you have only been gathering information for a short period of time, then your data may not be reliable enough for you to be able to identify real correlations. On the other hand, if you are able to tap into your own well established data reserves, you can potentially start to identify yearly trends in volume. From there, planning the best time to roll out a business improvement will be much easier, as you can time things like renovations to occur when your sales are lowest, minimizing impact, and put out new marketing materials like videos and press releases when business is doing well.
Old data is best used in conjunction with new research. Fine tuning the deployment of capital can be even more effective when both historical data and new market research are combined, painting a more vivid picture of the potential opportunity within the markets you are targeting. Market research can be conducted on a local or national level, but should be fine tuned for your specific demographic in order to avoid skewing results with information that does not directly apply to your business.
If you are not keeping track of your data, you need to start. One of the issues that is often present within small businesses is a lack of adequate documentation of key processes. If your business has not been keeping tabs on sales data, then it is a good place to start creating an overall documentation of processes. The process of creating the documentation can also shed light on where your business is not performing efficiently and where it can stand to improve, which in and of itself is extremely valuable. Integrate data collection into the regular processes of your business. While at first the couple of extra steps created by your documentation process may seem tedious, the fact of the matter is having your own data on hand is essential if your business is going to keep growing and planning new steps. Starting now is your best bet.
Photo Credit to Sean MacEntee on Flickr