Data Analytics and Its Effect on Small Businesses

by Frankie Wallace, Guest Contributor

Data analytics are far more than just a buzzword or a tool useful only to huge corporations. Businesses of all sizes can take advantage of the benefits that data analytics provides, and now more than ever analytics are becoming widely available for use, making them a viable resource for any business interested in using them. Data analytics can have powerful, tangible, and lasting effects on small businesses if implemented properly.
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Data Analysis Is Growing
Data analytics have grown wildly popular in the last decade, and for good reason. Businesses large and small benefit from data analytics because it offers a highly precise and accurate way to improve how a business performs all of their day-to-day operations, from marketing to inventory management. By using data analytics, a company can gain a better understanding of their customer base and what they want and need from the business overall, allowing a business to grow in a mutually beneficial way.

Data analytics tools make use of the huge mountains of data that any business creates and turns it into a useable product of sorts. While more data yields more in-depth results, even small businesses generate enough data in their daily operations to make use of analytics. A small business owner can quickly and easily see what products or services are selling, as well as who they are being sold to. This gives them valuable insights into their own business that might not have been readily available otherwise.

While data was merely a byproduct of business in the past, it is now a valuable asset due to the power of data analytics. Though data analytics are popular today, the future looks even brighter for the businesses that implement data analytics and the analysts and software developers that provide it. The market for business analytics is expected to grow above the already massive $18 billion valuation predicted by industry professionals.

Analytics Helps Businesses Make Smarter Decisions
One of the greatest benefits a small business can reap from the implementation of data analytics is the ability to make more informed business decisions concerning growth. By analyzing a business’s current situation, data analysis can help to improve the outcome of future decisions that a business makes. This type of data analytics is called prescriptive analytics, and some hail it as the next great technological paradigm, capable of making highly accurate predictions in countless situations.

This ability to predict what the most sensible and effective business move would be in any given situation is especially enticing to small businesses. Large corporations have access to a huge amount of resources and are already well-established, giving them much more wiggle room when it comes to making business mistakes than a small business is afforded. In many cases, one wrong business move made early in the life of a small business can spell absolute disaster, causing a complete failure of the business.

However, with predictive data analytics, a small business can make smart moves that ensure stable growth, the ability to reach new customers, and opportunities to connect with existing customers in far more effective ways. Prescriptive analytics can also help a small business to decide exactly how much money they should spend on marketing campaigns and what direction to take them in order to maximize effectiveness. Small businesses can rely on data analysis to give them an edge in the business world and help prevent them from making costly business mistakes.

Data Analytics Are Incredibly Helpful
The potential applications of data analytics can affect nearly every aspect of a small business. Training employees, marketing, customer acquisition and retention — data analytics has radically changed how we approach each of these, proving itself to be an invaluable tool for business owners. Forgoing implementing data analytics wastes all of the valuable data that a business collects, essentially leaving money on the table.

Data analytics can be used in the warehouse to predict when items need to be reordered and how much of any given item should be on hand at one time, freeing up valuable space. Analytics can help in the hiring process, sorting through hundreds of applications quickly to find the perfect candidate according to a business’ parameters. Data analytics effectively allows business owners to see exactly what is happening in every aspect of their business, often in real time. Real-time analytics bridges the gap between a business and the consumer as well, providing a business with useful information about customers that would otherwise never be cataloged.

Data analytics can help small businesses play to their strengths while downplaying their weaknesses, allowing them to cultivate a strong brand image that reflects what their customer base wants from a business. Small businesses that decide to forgo implementing data analytics are doing themselves a massive disservice; the edge that data analytics provides small businesses when it comes to everything from marketing to daily operations is invaluable.

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