Having a solid grasp and understanding of information is a key element for achieving business success. In today’s guest post, Heridev Business Solutions offers insight on the importance of tracking and interpreting business data for the entrepreneur, home-based and small business owners.
It was 3 pm and Susan’s Sandwich Shop was closed for the day. The staff was gone and the proprietor, Joan, was planning an early departure too to spend the evening with her daughter after whom she named the shop. It was a slow day as there were no throngs of office workers and students lining up for the inexpensive gourmet sandwiches.
As Joan checked off the receipts from the point of sale machine that was leased when she opened the business four years ago, she noticed that something else was also very different. The sales were a quarter of the regular daily intake.
While reviewing the cash and card receipts, Joan wondered if her plan to close all weekend was the right one. So as to soothe that nagging fear, she decided to look at the sales history for the past two years around the Easter and Passover holidays. She also pulled up her bank statements for the same time last year.
Upon viewing the historical data, the proprietor became less worried as it was apparent that the numbers were typical for the shop during those holiday seasons. Whew, what a relief.
Like Joan, many small business owners have invested in technology and software that store a lot of historical data about their business’ sales, purchases and performance. For some of these entrepreneurs, this data can be found in point of sale systems and for others it is in their accounting software. Even the shoeboxes filled with receipts and invoices hold valuable information that, if analyzed, can help the entrepreneur to make better business decisions.
Data Efficiency and Interpretation
What though is the most efficient way to capture information? Automated systems are able to produce detailed reports quickly which is why Joan was able to see the numbers for a three year period within a few seconds and make the necessary comparisons. Automation also improves efficiency by recording and tracking information about sales, customers, purchases, returns, etc. that, if done manually, would take hours to complete. ZDNet, the business technology news website, opines that obtaining a good point of sales system is a worthwhile investment for small retailers and restaurants.
However, data by itself is of little value to the entrepreneur if it is not interpreted to identify relevant trends and patterns. If she wishes to, Joan can easily identify her best selling items for the past four years. She can also effortlessly know which product is the cash cow for the business based on data from the sales margins report.
The small business magazine Chron argues that it is critical for small businesses to analyze the information that is available to them so that they can use it to react to changes in consumer preferences and adjust their strategies in response to the opportunities and threats that are present in the external environment.
Information is a vital resource for any entrepreneur and technology makes it easy to harness and use the data gathered. So then, what will you do with your business data today?