As a business owner, you are constantly making decisions that impact the financial health of your company. It’s all about making the right predictions, spotting the right trends, and understanding market conditions to unlock more profit and lower risks. More importantly, you need to be making these decisions in a timely manner. This is where actional data comes in to give you more valuable insights.
What is actionable data?
Actionable data is simply data you can use to make informed decisions. Unlike raw data (which is difficult to interpret), actionable data gives you the right information from which you can take specific actions. Think of it like this: all business data can be accurate, but only some of that data will be relevant for decision-making. It allows you to make decisions quickly and confidently.
From Data to Decision: Speed matters
So does faster decision-making improve profit? According to research performed by OrgVue, it can. In fact, they found organisations that had access to the right data made faster decisions, resulting in 16% more gross profit. Furthermore, 74% of respondents responded that they regretted making business decisions too slowly.
As explored before, getting your hands on the most relevant data can help with making decisions quicker. But once you’ve got actionable data, what do you do with it? Here are three ways you can put actionable data to work.
3 ways to use actionable data
Unlocking bigger profits
‘Grow at all costs’ may have been the mantra for the past few years. But recent economic challenges have retaught us the importance of profitability. Actionable data allows you to see exactly how much money your business is making and where it’s being spent. As such, it can help you identify areas where you can save on costs or double down your efforts to achieve even bolder growth.
Tracking Cash Flow
The lifeline of every business, cash flow is what keeps the wheels turning and the lights on, especially through particularly challenging times. For small businesses, cash flow can be difficult to predict, especially if your income stream isn’t steady. Tracking your cash flow can help you hone in on areas to improve, like specific expenses that are draining your reserves.
Identifying Growth Opportunities
Finally, actionable data can help identify more growth opportunities for your business. By analysing data on market trends, customer behaviour, or other key indications, you can identify areas for expansion and increasing revenue. You can even use this data as a jumping-off point to develop a growth strategy.
How to get your hands on better data
There are a myriad of different ways to track data. The important thing is to find one that’s efficient and consistent for your business. Technology that automates day-to-day business tasks, such as marketing or payroll software, can make it easier to capture and store actionable data. Instead of spending hours inputting data points manually into spreadsheets, you can use these tools to automate the data management process, giving you more time to analyse, interpret and then decide on your next course of action.
Pulling it all together
When running a business, the stakes are high. A few wrong decisions and you can find yourself turning down a path that no longer aligns with your business goals. By analysing specific, measurable and, most importantly, relevant data, you’ll gain the right insights that will help drive business growth, profitability, cash flow and long-term success.
First published in July/August 2023