Have you ever wondered why those large international corporations have grown to such huge proportions? As a small business owner you may be content to stay relatively small but you certainly would like to do better. This is where analytics come into play and if you really want to increase your bottom line then it is vital to understand just how important analytics really are. Actually, analytics is a vital part of any business no matter how large or how small and in literally every department as well. Here is a bit about what you should know.
Analytics to Assess Performance
Obviously any business needs to judge its performance to date. Have goals been met and if not, why? It is hard to forecast future performance if previous goals have not been met or if it’s not understood why they weren’t met. Metrics will tell you what has happened but not why and it is the ‘why’ that makes a difference. If you are looking to make adjustments going forward so that next quarter will look much better than the one you’ve just been through, you need to know what happened. Was it a production issue or a marketing issue? Is something going on in the economy keeping buyers from spending their money?
Profitability in Terms of Cost
Anyone who has ever successfully completed a master of science in analytics online such as that offered by Villanova University would be the first to tell you that analytics plays a huge role in balancing cost against profit. Metrics (statistics) will tell you what you spent vs what you made but that doesn’t go far in determining how to make a greater profit going forward. The entire set of numbers needs to be analyzed in order to determine if there are ways to find cheaper materials to work with or if the prices simply need to be raised in keeping with what is going on in the market. This is a key area where analytics is integral to the successful operation of your small business.
Assessing Employee Performance
Then there are the people who make your company what it is. How are they doing? Do you feel they are under performing, at ‘meets’ or even performing above and beyond what was expected of them? It almost takes that online MSA degree to weed through all the variables necessary to assess employee performance. There are a great many factors involved in employee performance, each needing to be weighted in order to score a point to that employee being rated. Ongoing policy changes can only happen if key metrics are analyzed to support those changes.
The long and the short of it is that analytics are integral to literally every area of your business. There is no getting around it. From marketing to manufacturing and everything in between, key stats must be analyzed to keep what works in place and to fix what’s broken. As the old saying goes, “If it’s not broken, don’t fix it!” And you have no way of knowing what’s broken and what works unless you do a proper analysis. Is your small business broken? If so, analytics is just what the doctor ordered.