Small Business Analytics: The Competitive Advantage

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Small Business Analytics: The Competitive Advantage

As an owner of two small businesses, I realize that small business owners often sacrifice one best practice option over another due to lack of resource flow at some point during the life of the business. The lack of resource flow in small businesses ignites a bottleneck that results in income decline. That decline takes time to rebuild and ultimately retained earnings suffer. Business analytics and strategies propel your resource management ahead of potential bottlenecks, keeping your resource inflow at a higher acceptable ratio over your outflow, while continually increasing retained earnings. In this era of dynamic change, staying ahead of the change curve can be challenging. Business analytics is now vital to jet small businesses to the top of their market.

Accounting: It goes without saying that accounting is an important task to track for initial business analytics. Financial accounting is tedious for the fast-paced business owner but, can be easily outsourced to a local professional for a nominal fee. Inter-web accounting programs can be a good deal, but often do not give you the report formatting you want or need for personally designed analytics. Inter-web programs may cost less, but hiring a local professional saves you time, money, and headaches.*

Analytics: Well-designed analytics will help you form questions that lead to strategic change. The way to increase your business success is by abundantly increasing your resource options. Do know what your best resources are; your products, your clients, your service? Start with one statement, “Follow the money trail”. Below is a small list of possible questions that analytics can create for the next steps forward in your business.

·       Where is your 80/20? Where should your focus be?

·       Does your inflow stay consistent across the board?

·       Should you offer a referral program?

·       If yes, at what inflow level should the referral program begin?

·       What would be the best incremental increase for the referral program?

·       Should you focus on a point program or cash-back purchase program rather than a referral program?

·       Should you invest in the stock-market with your retained earnings or open a second, third or fourth location?

·       Should your market focus be New York or Montana?

End-Game: Start your analysis with your end-game in-mind and back into the results via your analytics. Each business store front is its own entity with its own culture. i.e. a Starbucks storefront on the MTSU campus in Murfreesboro, TN is different than the storefront in the Leo Burnett building in Chicago, IL , and different from storefront by the Lingyin Temple in Hangzhou, China. Your strategic analytics consultant will recognize this and focus on continual strategy over-time, while maintaining and enhancing your desired culture with a business strategy put into practice. As a small business owner, remember, search for the best value in your analytics consultant. In the end, the best analytics is a solid business strategy that can be flexible based on the trends and solid in company goals, values, and missions.

*Note to 1099 employers: Please avoid only quarterly accounting. Because you can track quarterly, does not mean you should. W-2 employers have a slight accounting advantage in that they must pay taxes on behalf of individual employees. That tax creates a forced accounting process; at least for payroll.