The Importance of Tracking Data & Utilizing It for Business Intelligence

Data is mentioned everywhere nowadays.

You, as a business owner, are already collecting data without realizing it. It comes in the form of client information, company purchases, sales, et al. The most basic form of data tracking that all business do is accounting. You manage sales, purchasing, fixed cost, advertising spend information together. This allows you to see whether the business is generating a profit or less for a set time frame. Using just this required data, you can analyze it to find trends in revenue, spending, customer acquisition cost, and other key performance indicators.

Financial data is a good starting point to find areas where outlying data may be affecting your business. Some examples include:

Flat revenue but an increase in COGs

This would suggest your supplier costs have increased, therefore need to investigate the reasons behind it and possible adjust your retail price to keep gross profit percentages in check. If in manufacturing, this may also mean labor rates have increased, which may need some further investigation to resolve.

Increased Gross Profit but a decrease in net profit

This would mean your fixed costs have increased. Depending on your accounting, you may be able to find what increased this period and see if it was an outlier for that period, or a increased cost that you did not notice. Pinpointing the issue and finding possible solutions would require data.

Other data can be collected to find trends regarding your consumer base. In automotive accessory shops, important data points would be: make/model, source of the customer, and customer zip code. This information will allow you to find patterns in your customer base. If patterns are found, you may be able to build a customer profile for your business for specific items/services and make data-driven decisions related to marketing.

Business Intelligence

Learning how to utilize your available data to make informed decisions is vital to all businesses. Data, when properly analyzed, can paint a story to confirm your intuition.

Need help on figuring out which data points may be important to your business? Schedule a web meeting so we can discuss your business's unique situation and how to remanage your uses for data.