If an entrepreneur is not analyzing analytics, their chances for success are slim.

In order to develop effective strategies to increase revenue and improve a company’s performance, it’s very important to analyze the analytics.

Why is it Important to Analyze Data?

If entrepreneurs aren’t analyzing data, how can they make improvements and create effective strategies for growth?

Data matters. If you aren’t analyzing data, you’re winging your business plan, hoping for the best.

Furthermore, if entrepreneurs plan on pitching their business concepts to potential investors, the first thing they’re going to ask for is DATA. So keep track, stay organized, and make sure you have a great accountant.

Data is useful for the many different departments within a business and predicting future revenue. There are different types of data, including quantitative and qualitative data which are useful for different reasons.

The importance of analyzing quantitative and qualitative data should never be underestimated and is often overlooked by many business owners.

Before improvements can be made, entrepreneurs must first analyze data and processes to fully understand the issues at hand.

An entrepreneur who fails to analyze and understand their company’s data in depth will never be able to make the necessary improvements for their business.

As a result, the company will underperform and fail to be as successful as it could be.

To be successful, entrepreneurs and their employees must possess the ability to think creatively, analytically, and innovatively. Data is a key part to innovation and strategizing new ideas for growth.

Important Data to Analyze

All business owners MUST analyze data to be successful. Every single department within a corporation (finance, marketing, sales, etc) must be informed on the various analytics pertaining to their department in order to develop effective strategies.

 Collecting this data will provide entrepreneurs with rich, comprehensive information to improve their business.

Descriptive Analytics

• Research and summarize historical data to identify patterns.
• This is the process of quantifying data.
• Example: How many sales did we do in January? February? March?

Diagnostic Analytics

• This is the process of understanding the why behind what happened.
• To improve your business, you must first identify the problems at hand. Only then can you come up with solutions to improve.
• Ask questions to better understand why your business performed the way it did. Find out exactly why things went wrong and who was responsible.
• Determine whether the issues were a result of a failure to communicate or perform.

Predictive Analytics

• This step is all about using the information collected in steps 1 and 2 to predict a company’s future level of performance.
• The information collected through descriptive analytics will provide you with an estimation of future revenue and other quantitative data relevant to your business.
• Diagnostic analytics will show you why it will happen if you continue conducting business the same way.

Prescriptive Analytics

• This step is where solutions are created.
• To address the issues your business is struggling with, you and your team will need to come up with the necessary changes needed to improve your business.
• By considering the information collected in steps 1,2, and 3, you will have the ability to develop better strategies, solutions, and the right types of changes for your business.

Questions to Ask:

• Do you have the necessary funds to make the changes needed?
• Are your employees competent and skilled in their roles?
• Are they efficient with their time and the resources they are provided with?

READ MORE: 6 Ways to Be a Great Leader

ABOUT THE WRITER:

Elena Patestas is a journalist and writer for Valuetainment media. She attended Pepperdine University in Malibu, California, and Adelphi University on Long Island, New York. She was born and raised in Roslyn, New York, and currently lives in Miami, Florida.

Elena is passionate about bringing positive change to our world and believes education is the root to solving many societal problems. After overcoming a chronic health condition, Elena became passionate about health and believes food is the key to preventing dis-ease and achieving optimum health.

Amongst her many goals, she hopes to bring positive, impactful change to our world to create a healthy, financially sound, and unified society.