Surviving in business long-term means having the ability to evolve profitably over time. In order to evolve profitably you must learn from the things gone wrong, (TGW) and things gone right, (TGR) in the past. Learning from events of the past allows you to turn the knowledge gained into educated continuous improvement plans based on fact and data that will allow you keep up with the highly competitive markets of today.
The importance of data collected from past successful events and unsuccessful events as well is critical when determining future plans geared toward keeping your competitive edge and boosting profits at the same time. Data and records are the backbone of your business. In this collection of notes, facts, figures and other records of activity lies the history of your successes and failures. If you believe the previous statement, then it will be of great significance to you knowing that in this collection of data lies the facts needed to lead your business to success.
Previously written in an article called, Small Business Tools, “Measuring your Efforts", the basic areas of overall business success were defined.
Research and Knowledge
Keeping these areas in mind, the data collected from them provide you with individual maps and sub-maps to where you have been and what happened as a result of the roads traveled. From here you will extract the data necessary to make fact-based decisions on where you need to go from there.
How is this data collected and what determines the criteria necessary to collect for these fact-based decisions? The answer lies in you. Your business needs will define the data you need to collect based on your overall business plan objectives. From there you will need to determine how that data will be collected and analyzed.
Determining the data and how to analyze it is not a complicated task. You don't need to be a statistics major or marketing professional. In general the four areas of business success mentioned above form the areas of analysis. Your business needs will determine the sub elements you will define. Below are some simple forms of collecting and analyzing the defined data that are extremely useful.
Checklists- These come in many formats. Extremely useful in collecting attribute data that comes mainly in the form of yes/no answers. Once collected over time they can provide you many answers to customer preferences, advertising strategy success, responses, etc.
Ledgers- We all know of these types of records. This method provides variable data in the form of facts and figures over time. Perhaps the commonly known and without a doubt the most powerful form of data. Sales volume, profit margin, overhead, costs are just some of the many valuable figures that can be used to predict slow periods, heavy periods, advertising effectiveness, etc.
Charts and Graphs- These tools can not only be used to analyze the data collected from checklists and ledgers, such as, production times, shipping and delivery times, return rates, complaints, and many other items critical to business productivity and efficiency.
Data of this nature, once analyzed, can put your business in a position to make decisions based on facts. These facts can point to key trends that will allow you to predict the actions necessary to improve or get an edge over your competition. They can also give you direct feedback on the efforts put forth vs. the results achieved. In short, this knowledge gives you the ability to progress from things gone right and prevent repeating things gone wrong.
Article written by Douglas Lukas. Reprint rights granted if entire article including this resource box is included. You can contact Douglas Lukas at http://www.business-bytes.com