May 07, 2015

Big Data for Small Business Owners


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“Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it…”—Dan Ariely

Everyone seems to be talking about big data and how it is transforming business and the way that it is being conducted.  Aggregating data and molding it to help you find the next big business solution is the topic everyone seems to be talking about.  It has yielded a whole new job description – “data scientist”.  Data scientists “have the sexiest job in the 21st century”, according to Josh Wills, a senior director of data science at Cloudera.  That’s pretty impressive since there was no such job during our collegiate years!

So if you are a business owner, there is a good chance that you don’t have the funds available to invest in a data scientist.  However, there are a few ways to gain access to the information that you need without burning up all of your hard earned cash balances to do it.

Find Efficiency Through Outsourcing

In the hectic world of running your business, you should be looking for ways to take work off your desk.  One way to do this is to find companies that can perform the tasks better than you AND give you the data that you need.  There are many “back office” functions that you can designate to a key finance partner such as paying your bills, collecting your receivables and recording financial transactions.  As illustrated in this recent Wall Street Journal article, there are a growing number of companies in Corporate America that are turning to automated solutions to handle their non-core functions.  For Fortune 500 companies, this translates to job reductions and reduced costs and gaining the favor of the buy-side analysts that follow them.  For the small and medium sized business owner, it lessens the need to increase your full time employees on hand and the increased costs that come along with them (payroll costs, benefits, office space, etc.).  You can keep a lean organization, minimize your cash burn rate and get better data on your marketplace and customers.  Wouldn’t it be great to be handed a summarized sheet that details your total accounts payable as of today, supplemented by a listing of your top 20 vendors and trailing 12 months of purchases made with each one?  Or a detailed sales journal that shows product sales by state to determine where your marketing campaigns are working and not working?  If you work with the correct finance partner you can get this information without taking time away from running your business.

Don’t Abdicate, Delegate!

We realize how hard it is for small business owners to assign someone else within their organization tasks that they are normally accustomed to doing themselves.  Maybe you have a certain way that you send bills on the 15th of every month.  Or you know that a particular vendor requests to have her invoices scanned to her at one time during the month instead of having them sent over piece meal.  In order for you to maximize the value of your business, it is imperative that an entrepreneur learn how to delegate these non-business development tasks to others.  As Dr. Lozata discussed recently on our Prophets of Profits podcast, in order to make money you need to invest in your business.  This does not mean that you stop checking in with the person performing the task.  It is important to have regular meetings with the individuals performing the duties in order to make sure that your high level of customer service quality is being met.

Keep Up With the Joneses

One thing that we find is true with most entrepreneurs is that they love to share the latest tools and apps that they use to improve their business profitability.  Need to improve sales and still be able to watch your kids play sports on the weekend?  Check out Infusionsoft, a software application that provides small business owners a platform that efficiently combines your customer and prospect data in digestible pieces so that you can pitch your products effectively.  How did we find out about this software? We asked other people about how they dealt with the issues of increasing sales.  We realize that pride can get in the way sometimes and make us hesitant to reach out to others and see how they are able to process data so quickly and efficiently.  We learned that we needed to get over ourselves and started talking openly with others about our business challenges.  By having the right business partners and colleagues around you as resources you will find your business acumen increasing regularly.

Thanks for reading – keep smiling!

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