Simple decision making with data - how to easily increase your profits

We all know data is important, but how can it be used to its maximum potential? Enterprise Nation adviser Lyane Bartlett talks through her top tips on this very topic.

Data boosts your business growth quickly

Many small businesses and start-ups aren’t aware of the benefits a little bit of data analysis can have on their business. But in recent years we have seen start-ups that utilise data skyrocket their growth and become some big household names, for example Gousto, that was founded in 2012 and turned over £100m in 2019.

Their founder Timo Bouldt is clear that he sees the business first and foremost as a data company; his latest soundbite is “we are a data company that loves food.”

He knows that data tells them the truth, it tells them their exact customer trends so they can tailor everything they do to boosting sales - keeping customers happy and reducing costs. I definitely recommend a read of the article for more on Gousto’s data benefits.

Alongside some of the benefits listed above by using your data well, you can also expect to:

• Increase efficiency

• Have accurate product pricing

• Boost profits

• Save costs

• Increase customer retention

• Speed up your supply chain

• Identify internal efficiencies or staffing/process changes

• Find new customers

All of this above is possible by using data as a part of the decision-making process. To start off, you need to ensure your business has a process for making decisions, then bring data into it. Many businesses, even large ones, don’t have a formal decision-making process as such.

Be data-led not data-driven

Decision making should be data-led, not data-driven – a term you may hear a lot – but to me being driven by data is leaning towards a thought that ONLY data is important.

I have to stress that it’s not It’s all about the balance of data alongside the knowledge you have of your business and its capabilities. Like mixing the facts with your previously taught experience - for example: looking outside at the weather to decide what to wear that day, seeing its sunny but knowing the fact it’s autumn means it’s chilly too, something you cannot tell just from looking out the window.

By using data, you are bringing fact into the mix, which is something we do every day for many non-business-related decisions, but when it comes to business, we seem to believe data is complicated. I bet you’re fed up with trying something, see it not work, then try something else? Spending a large amount of money, not seeing the results, and then having to outlay money again?

Data analysis can save you money and time

Following the impact of the pandemic, you need to be smart with decision making to ensure the best possible recovery.

Through the mixture of cost saving—plus making a decision that has data to prove its effectiveness for your business—you will have a significantly higher chance of beating goals and revenue targets, with some companies seeing more than 20% growth on target all down to using data.

Using data in any decision making can be as simple as you need it to be - don’t let your mind wander to complex charts or jargon filled terms. Excel or Google Sheets are perfectly fine for performing the analysis you may need, perhaps by using their tables and creating sums/formulas through pivot tables if you know them.

This Deloitte study notes that: “49% of respondents said analytics helps them make better decisions, 16% say that it better enables key strategic initiatives, and 10% say it helps them improve relationships with both customers and business partners.”

Getting started with data for decision making

How do you get started with making your first data-led decisions? My suggestion is to get a good idea of the data you currently collect, then as practice think about a decision you recently made - it can be something as simple as ‘what item you should restock next?’.

If you looked at your sales data and sales frequency for each product you sell, was this the right product to re-stock or should you have ordered/made something else first? Once you have done this the first time using an old example, for the next business decision you need to make, you’ll know where to go for your data and have a starting idea of how to approach it.

If you have any questions for Lyane or require some business support tailored for you, please connect with her on Enterprise Nation, where she offers a free 30-minute discovery call.