Data is also for small businesses
Discover how small and medium-sized businesses can also extract value from data
Since I started writing on Medium, I have focused on the value that data have. In articles like “How much is your firm losing because of poor data quality”, “What is Business Analytics?”, or “This is how the data that will change your business is processed” we have explored data from different perspectives and how these are important in order to gain competitive advantage in the market. However, you may have the feeling that driving your business with data to allow your business to grow healthy and compete in the market is just something that large corporations with long budgets can afford. That is quite the natural feeling when most of what you hear about is massive amounts of data(Big Data), powerful technological infrastructures, large multidisciplinary teams, change or changes in all levels inside your business.
If you feel overwhelmed at this point, calm down. I’m from Spain, a country where small and medium-sized companies are an important part of the business landscape. For this reason, I want to help you understand how you can also take advantage of data to improve your strategies, get to know your customers better, and, ultimately, maintain and grow your business, even if you work or own small or medium-sized businesses. Here are four recommendations on how to get started with data.
☝🏽Start with a specific use case
You know your business better than anyone. In this case, you need to think about your business and identify a specific use case. It is recommended that being the first, you choose a use case that can be easily measured. Otherwise, you will hit a wall because you will not know where you can get the data from.
One of the most common mistakes when starting to work with data is trying to solve everything at once. It is not about acquiring a lot of data and “seeing what can be done with it.” It’s about thinking, what can I measure and what decisions will I be able to make when concluding? If you try to solve several situations at the same time, you will lose focus and it will be very difficult for you to answer the business questions that you have asked yourself. Also, the greater the amount of data you work with, the greater the resources.
As we discussed in the article “This is how the data that will change how your business is processed”, it begins with a question and ends by measuring the outcomes. It is just as important for you to choose the correct question as to measure the results you have obtained after deciding, because without measuring the results, you will never know if the decisions you have made will be right or wrong.
✌🏽Quantity is not quality
We are all well aware of the fact we are living in the information age, where huge amounts of new data are constantly being generated all over the world e. When talking about data in mass media or social networks, we usually refer to Big Data as the only existing data. When we talk about data we are biased and we think that a large amount of data is always necessary to be able to extract value from it. Big Data is just a collection of data that meets several conditions: volume, variety, velocity, veracity, and value. You can count with the fingers of one hand the companies that, in Spain, have the amount of data necessary to be considered Big Data.
You don’t need to have a massive amount of data to drive your business, it is also possible to do it with smaller data sets.
If you are not sure where you can get the data to work with, first think about the internal data sources of your business that you can use. Here are some ideas to help you:
- CRM
- Sales history
- Product stocks
- Website’s Google Analytics data
- Emails
If the internal data sources of your business are not enough, extend them with external sources, such as social networks or web scrapping. External sources allow you to complement the vision you may have of your business.
In any case, think that the more data you have, the more data you will have to clean and analyze, which will surely increase the cost. Get a dataset large enough to develop your chosen use case, and don’t try to fill in unnecessary data.
🤟🏽 Get rid of unnecessary things
Large companies can dedicate a lot of resources to extracting value from their data because they can afford it. Large companies also fail, but when they do, the consequences are not as critical as when you fail, because they may fail at something, but they surely will succeed at something else so, the overall will be positive eventually. However, if a small business fails, the consequences can be painful.
As a small business, it does not make sense to make a large up-front investment when you are not sure if you are going to have a real return on your business. If you can analyze the data, get conclusions, and make decisions based on those data, well, it’s fine, but if your actions’ outcomes are not enough for your business, it will be useless.
Some examples of things you don’t need to start extracting value from data are:
- A complete data department
- A big team for mining those data
- Huge amounts of data
- A large investment on IT infrastructure
Behave as if you were a startup that wants to build a minimum viable product. Focus on the essentials, reduce unnecessary costs. You are starting. If all goes well, the rest will come by itself.
✊🏽 Take advantage of agility
Companies are like ships. Changing direction is not an easy task for a cargo ship. However, if you have a 65-feet sailboat, you have no problem changing your course as many times as necessary. In business, the analogy stands. For a large company, making decisions that affect the entire company is difficult because it requires many people to achieve consensus and re-align the entire firm. However, the smaller your business, the easier it will be for you to shift as many times as you need.
Take advantage of the agility you have as a competitive advantage versus bigger companies. If you don’t have enough data, look for additional sources. If the use case you have chosen to start becomes complex, identify others. If the data gives you a vision of your business that you did not have before, align your business model or your product in the right direction. Be open to new ideas, be flexible, incorporate the startup mentality into your company.
More and more companies are driven by data, which means, among other things, that the decisions they make are based on data. If you have a small company, it will be much easier for you to become a data-driven company, which will allow you to make more objective decisions.
Working with data is something that everyone can do even if you are a small business or work for one. You can take advantage of data too, but at on a different scale. Be consistent, invest the necessary resources, but stop thinking that more is better.
The 4 points that we have seen in this article will guide you so you may know where to start. As your business grows, the demands will be greater and you will have to continue investing in order to support the decisions you need to take. Don’t get ahead of yourself, take advantage of the capabilities you have as a small business, and adapt. Measure, experiment, and, above all, confirm that the actions you take have a positive result.
Thanks for reading! 🤗
