The 3 "Easier Said Than Done" of Business in 21st Century - #1 MAKE DATA

Adapted from: awkwardgravity.com

Businesses like to play it safe. They wait to hire. They hesitate to spend money on advertising. They don’t collect too much data and the data they do have sits. Like old toys in the attic or tools in the garage. Maybe one day.

The truth is, avoiding risk is the riskiest thing a business owner can do!

The Small Business Administration (SBA), the Bureau of Labor Statistics, even the normally political FiveThirtyEight have said their piece. American Entrepreneurship is dying!

The economy is being dominated by large companies. Why?

Data. 

It’s true, data has an unreasonable effectiveness. The more you have the better it gets.

That doesn’t mean your small/medium business is doomed. In fact, this is the data gold-rush.

The large companies have diseconomies of scale. A fancy word for all the difficulties of being a giant. The added layers of bureaucracy. The “people” departments that cost, but don’t earn.

I’ll say it here, unequivocally,

“90% of the data on Earth is less than two years old. If you use yours effectively, you’ll grow, profit, succeed, and feel a business confidence you’ve never felt before”.

So what can your small business do to keep up?

#1 Make Data

Answer these questions - the back of an envelope is fine:

What do you sell?

When do you sell it?

When did you buy it?

How much do you sell it for?

How much did it cost you? [flexible Marginal Cost]

How many do you have of it?

How much do you pay for rent, electricity, water, shipping, and employee-hours? [Fixed Cost and less flexible marginal costs]

Who sold it? (Can your employees affect sales? Can you reward them for doing so positively?)

Who bought it?

Do you have a way to record all of this?

These are the basics of Data Management.

# 2 Clean the Data

Maybe you have a lot of data. Can you access it?

Are you closed on some days?

Have you experimented with inventory recently?

Lost track of invoices or product costs?

Is your inventory marked too generally? too specific?

Changed employees a lot recently?

Does your data have blanks, impossible numbers, lost numbers, or misspellings?

# 3 Analyze the Data

Using statistics and data visualization you can get real business insights to increase profits by reducing costs AND raising revenue. Imagine each of these statements with the perfect picture worth 1000 words and maybe 1000s of dollars.

Stop buying _____________.

Keep ______________ in stock. Fire _________________, they’re a weak seller

even during prime time hours. Make _____________ full-time. After adjusting for

store traffic, she’s twice as good as average.

Keep open another hour on

____________________. You’re losing money being open at ______________ on

______________.

Your weakest times are

___________________. Hiring someone for ___________________ will convert more

traffic into sales, people hate waiting.

Find warnings that your competitors don’t have.

We predict

________________ to increase in price within a few months. This vendor is

costing $_______________ when they’re late ___________ days on average. With

this month’s weather forecast we’re expecting to need more _______________ and

we can safely increase the price to ________________.

#4 BONUS - Automate or Outsource?

Ok, you've read this far. Maybe you're laughing, "this is so obvious". That's awesome! You're poised for Business in the 21st Century.

Maybe you're halfway - "We keep a lot of records, we know what sells, but we could definitely optimize more". That's okay, there are programs and people out there to get you to the finish line.

Maybe you're at square 1. "I think I made money last month, we're not broke yet!" Ahh! Oh no! This is no way to do business. Start at the basics. Point of Sale Systems, Excel, Stock Keeping Units, a filing system. For "do it yourself"-ers check out Quickbooks POS - lots of documentation and helpful books for cheap. Good luck!

If you're in cases 2 or 3 and want some help - email me at: [email protected]

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Name

Business Name

Business address

Industry – a few details about your products/services and history

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Any details that may help in understanding your special place in the economy.

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