Why data analysis is important for your business

Business Insights

Running a business can be tough. There will be highs, lows and often long hours. As an SME business owner you perform many roles and time is often spent working in the business rather than on it, so taking a step back and giving thought to realising your business’s potential and maximising performance gets pushed to the back of the queue.

Stuart Fullerton, from White Space Management Consultancy, has some suggestions as to how you can create the right environment to ensure your business is operating at its full potential.

According to Fullerton, it’s all about the data.

“Both financial and non-financial data tells a story and provides a valuable insight into your business and how it operates. Being able to stop just describing data and start transforming it in to meaningful insight is what will make the difference to the future of a business,”
he advises.

An important first step is to start analyzing the critical functions of the business so that you are fully aware of the current status of the operations at the forefront of what you do. More often than not this will shed light on some areas of your operation that require immediate change and will have a positive impact both on profitability but also the customer experience.

With accurate financial and non-financial data you will be better placed to make informed business decisions. This may seem obvious but too often day to day work just gets in the way of looking closely at those figures and the insight that it provides meaning the crucial detail gets missed.

With this information, you are then able to:

  • identify process inconsistencies and remove unnecessary financial costs
  • improve the accuracy and data in your management information reporting
  • make process improvements using methodologies such as Six Sigma and Lean to increase the effectiveness and efficiencies of your operation
  • identify potential opportunities and threats
  • develop a plan of action and considered strategies that are practical to implement

Ensure that you include timelines and milestones in your action plan, clearly communicate these to staff and build in tailored training for your staff, both to support the business in its growth, and to provide them with the tools to deliver and track performance. A motivated workforce will help to create a high performance culture where staff feel empowered to challenge the status quo and offer up suggestions that may have previously been overlooked.

Looking back at what has gone before, through the business KPI and financial analysis, puts you in a strong position to think about how you can apply this knowledge and insight to improve your financial and business performance for the future. It’s not solely for solving immediate issues.

Therefore aside from the daily managing of cashflow, keeping customers, suppliers and staff happy, it is essential to have structured and well thought out strategies and effective systems to keep everything on track. Regular data and KPI analysis puts your mind at rest and monitors the progress you’re making meaning you are able to be proactive, rather than reactive, when it comes to tackling issues. This is especially true, of course, when things don’t quite go to plan.

With Brexit on the horizon and the uncertainty of a deal or no deal outcome, this would be a good time to start gathering data and undertaking a full business analysis to try to foresee and manage any impacts of the decision to your business. Do you have a strategy in place or even started thinking about how Brexit will impact your business? Is there an issue in your business causing sleepless nights?

Analyzing the numbers is not just about forecasts and budgets, it’s about good management practice and setting the right path for the future of your business. Use the data in your business to drive insight and use the insight in your business to drive performance so that you, your business and your staff can flourish and stay ahead of the game.

For more advice or help with improving your business data and performance, visit www.whitespaceconsultancy.co.uk