There are three types of lies – lies, damn lies, and statistics.” — Benjamin Disraeli

We love this quote a lot. There is a lot to be said about statistics and it is important to use stats as empirical data for better ways to support your customers and provide the base for your business model to build off of. However, you need to carefully consider if the statistics are telling the whole story or is it missing part of the picture. The Bureau of Labor Statistics stated recently that the unemployment rate was 5.5%, which almost 200 basis points lower than the 7.3% it was almost a year and a half ago. This sounds like employment rates are improving, right? On the surface, it does. However, what happens to the workers who are so discouraged about work that they have given up on finding full-time employment? They get removed from the statistics, thus inflating the number of people employed. What kind of jobs are these employees getting – work that they went to college for or at the local franchise operator in their neighborhood? You can’t tell from looking at the unemployment rate but supplementary data indicates that there are fewer manufacturing jobs being created and more food and retail service jobs being taken by 30 and 40 year olds. So is the unemployment rate improving or is it masking a deeper symptom of economic problems?

The point of this blog is not to debate economic recovery or recession. Statistics have their place in the world and in your business plan. Here are three things to keep in mind while running your business:

1. Research – it is important to do as much research as you can on the customer that you are trying to reach. Make sure you know as much as you can about them – how much money them make, their interests, what they read, where they live. You need to have enough empirical data to determine if your business model is sustainable.
2. Interpret – when you have put together the business plan based on the key factors identified from your research, make sure that you have seen the entire picture and not what you want to see. Look for multiple sources for your data to ensure that your information is complete and accurate.
3. Action – once you have your plan in place you need to act on it! Don’t be stricken by “paralysis by analysis”. Instead, go with your instincts and facts in hand to make your product more complete or your business more relevant.

Keep smiling!

Prophets of Profit