3 Reasons Why You Need Data To Scale Your Company

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Data is what provides the information you need to understand your company’s position in the market and identify opportunities to increase revenue and optimize expenses, both of which will support your company’s growing valuations over the years.

But to get there, you need to know where to find the data and how to capture, organize and interpret it to drive your decision-making processes.

Let’s see how data awareness helps you build a scalable business, gather data and leverage it to drive strategic decisions that lead to growth.

Related: Eight ways data analytics can revolutionize your business

1. Build a scalable company

What creates business value is not just profits. Whether you’re looking for investors, partners or bank financing, these parties aren’t just interested in you being able to generate surplus income. They want to know that you are capable and positioned to grow.

A common truth in life is, “if you’re not moving forward, you’re falling behind.” Although trite, there is truth to it for business owners. If you are just maintaining the status quo, there is a strong perceived implication that you will likely lose your competitive advantage over time. This softening of your market position will erode your value in the future, and investors and other stakeholders will recognize it.

The relevant example here is technology adoption. Depending on your industry, you may go a while without incorporating emerging technologies that offer the potential to operate more efficiently by reducing operating expenses, strengthening customer relationships, and generating more sales.

However, most of your competitors will adopt the technology, allowing them to outperform you in terms of generating value that will flow to their customers and investors. As a result, your market share will gradually decrease and you will become less attractive to stakeholders, including potential partners and employees.

Related: All businesses can work more efficiently with better data

Some of the essential cloud-based technologies you’ll need to stay relevant in almost any business include:

2. Identify, collect and sort the data

Being “data aware” depends on first recognizing where your organization’s data resides. Chances are you’re already leveraging some or most of the technology mentioned above. If this is the case, the task of locating data is simplified, and even more so if you use centralized systems across all units of your organization.

If you haven’t made the transition to digital systems and are still tracking things and doing business on paper, or if you use software but it’s on specific computers or servers internal to your organization, you’ll be at a disadvantage.

This obstacle can be serious if you have multiple locations and systems that are not connected, a situation where isolated systems are often referred to as “silos.” When that’s the case, you’ll need to commit staff or hire outside consultants to help pull data from disparate systems into a unified platform, breaking down silos.

Once you have all your data in one place, you can start putting data management systems in place specific to your type of operation. These platforms automatically collect and organize your data to make it accessible to all team members; now you know

Related: 4 Steps to Becoming a Data-Driven Business

3. Strengthen decision-making processes

At this point, your team and consultants, if needed, can begin the process of analyzing the data and reporting the findings. Through this process, data is transformed into knowledge. This knowledge creates information about the financial strength of your business, how well you are performing and where there are opportunities for improvement and growth.

The obvious metrics are those related to expenses, sales, and net profit. But you can also learn a lot about customer satisfaction and retention, resource utilization, comparative performance across locations and product lines, and more.

When you spot multiple functional areas where you can make improvements of even 1% each month or quarter, you can make substantial, even game-changing, progress. These steps will solidify your competitive advantage, support a culture of growth and unlimited opportunity, and drive your margins to the top.

Stakeholders will recognize that you are prepared to deliver returns not just today and in the coming quarters, but indefinitely. Your team and investors will sense your inherent growth potential and resilience, and your company’s ability to weather recessions, new market entrants, and evolving technology and social trends. In other words, your growth will be seen as sustainable and inevitable.

Related: Using data analytics will transform your business. Here’s how.

Starting on the way

If you don’t know where to start to become data conscious, start by holding a team meeting and openly discussing your goals with leadership (even if it’s just you and a notepad). Get an idea of ​​what systems and processes you have in place to collect and manage the data you generate in daily operations.

See how your systems are connected and see if your current setup allows you to understand how your business is doing today and whether you’re holding steady or on a growth path. Next, research the tools available for your industry to help you capture, organize, and transform data.

Whether you do it on your own, with the support of your team, or with the help of experts, you’ll be one step closer to building a business that delivers value and is positioned to compete successfully over the long term.

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