A saying rings true in business and life: “Some people make things happen, some people watch things happen, and others wonder what happened.” Entrepreneurs fall into the first category — they make things happen. They may suddenly come across a gap in the market or come up with a unique idea that will meet the needs of a group of people. Or they may go out in search of something that they can manufacture, market, and sell.
Entrepreneurs may fail at business time and time again, but they pick themselves up and start all over because they have faith in their abilities, and they know that, with much perseverance, they will make it. Moreover, in the modern age, more is possible than ever with the help of technology tools and data analytics.
Starting out in business
Those people who have a fantastic idea for a business and are dying to give it a try should be aware that a large portion of new businesses fail the first time around. People who succeed in building up a business from scratch generally have someone in the background, giving advice, lending expertise, and financing a new venture.
Entrepreneurs need more than an idea to run a successful operation — they also need business acumen, a sound knowledge of their product, and insights into their business processes, operations, and the markets they intend to target. Finances may or may not be a problem, but specific skills are required to manage them effectively. Once a company has established its target market, it needs to go one step further — find those customers and secure them with whatever it takes.
This all takes time and can be daunting — it helps to have the necessary business skills before launching. An entrepreneur might want to consider taking a course in business to learn specific skills and position them a step or two ahead of their competitors. Sound business knowledge is essential when in the vulnerable position of being the new kid on the block.
Entrepreneurs may think they have the business acumen and could be correct, but in today’s world, more is needed. New business owners need technology and the skills to leverage the best they can from the tools at hand. The entrepreneur with technical expertise in information and how to interpret it is the one who is most likely to succeed.
Technology and business tools
Whether an entrepreneur is just starting out in business or has been doing it for several years, technology is growing by leaps and bounds, and there is always a threat that one will be left behind. Today’s entrepreneurs are fortunate to have an assortment of technology tools available to help them in all aspects of their businesses — there is no shortage of options available. These include emails and social media platforms that empower their marketing and advertising, spreadsheets, sophisticated ERP (enterprise resource planning) systems with which to control their finances and take stock of their assets and inventory, forecasting tools that allow them to plan, logistics and tracking systems, and 3D design applications.
For those passionate about their business and wish to increase their knowledge and skills as an entrepreneur, an Online Masters in Business Analytics will provide a good understanding of how to use the tools at hand to improve their chances in business. At St. Bonaventure University, students will learn how to interrogate and organize data to produce meaningful information with tools that will help them make sense of present and past activities and empower them to predict future trends and opportunities.
Entrepreneurs can gain confidence in their decision making as they support their business instincts with the sound knowledge that large data sets can provide. Studying online allows entrepreneurs to focus on their business and research when it suits them. Undoubtedly, they will soon be using their newly gained knowledge to identify areas of their business that can be enhanced.
What is business analytics?
Business analytics is gathering large amounts of data to investigate past and present business activities and trends and use the information to gain insights to help business managers plan.
By analyzing data, business owners can learn from past mistakes and gain insights into what worked for the business, which sector of the market produced the most sales, who to target in the future, and what the current needs are in the marketplace.
Data analytics today is powerful enough to interrogate social media posts and extract useful information regarding market trends and preferences, analyze product information, and determine potential customers’ likes and dislikes.
Business analytics vs. data analytics
The terms business analytics and data analytics often overlap, but there is a distinct difference when it comes to having the business expertise necessary to interrogate the data and channel it into a model that can improve the profitability of businesses.
Data analytics is the process of analyzing large amounts of data and organizing it into a format that can be used to learn about trends and patterns and make predictions. Business analytics, on the other hand, takes the data sets and, with the aid of sophisticated tools, formulates a set of trends and patterns based on the historical data and uses the information to make informed decisions and predict future scenarios.
Processing the data
Data analysts are the people who analyze the data and organize it into data sets that business analysts can further analyze; they are the business analysts who specify what they want to see or achieve from the data sets. Business analysts, therefore, become involved in the early stages of data extraction and analysis, be it directly or indirectly.
The assimilation and analysis of data can be broken down into the following steps:
Data collection
Data collection, or data gathering, involves the process of extracting large portions of relevant data from the source, or various sources, and storing it in a specific area, known as a data pool, for further analysis. Data collection is used to support the validity of research objectives and findings.
Data mining
The purpose of this step is to identify the data that is relevant to the current exercise at hand. Once the pool of data has been stored, it is then sorted and ‘cleaned’ using algorithms that recognize patterns and eliminate data that does not comply with the current specifications. Some data may be analyzed again and ‘fixed’ to comply with the requirements. The data may be sorted into categories for further analysis.
Descriptive analytics
This is the process of getting answers to questions such as “What happened, and why did it happen?” — giving the analyst a deeper understanding of the information presented by the data. Descriptive analysis helps one identify mistakes and instances where the data does not conform to normal circumstances. Four methods of analysis are used in this step: frequency distribution analysis, measures of central tendency, measures of dispersion, and measures of position. Each of these methods helps to categorize the data according to the exercise specifications.
Prescriptive analytics
Prescriptive analysis poses the question: “What shall we do next?” prompting some serious thought on how to solve the problem. Computer algorithms can churn figures a lot faster than people can, and come up with suggestions for consideration. It is useful to note, however, that Harvard Business School recommends that while computer algorithms may be used as a tool to prescribe business actions, human discernment is still necessary when making the final decisions.
Predictive analytics
Using the various predictive tools, large amounts of data can be modeled to produce reports, graphs, and infographics, assisting managers to make predictions and informed decisions based on the information obtained from the data.
Marketing insights
Entrepreneurs usually have natural instincts when it comes to business — what products will sell and which sector of the market to focus their attention on. But it can often be a hit-and-miss situation. Trends can be fickle, changing in a very short period of time. By examining historical customer data, marketing strategies can be put in place to target specific customer behavior in terms of their wants and needs at particular times of the year, season, or month.
It pays to have a sound knowledge of one’s market and product. While some markets are stable, others are more dynamic, changing every couple of months and leaving businesses with stock that is redundant as the public moves on to something new and more exciting. Knowledge of these trends helps the business owner plan ahead and build in contingency plans. By not carrying too much stock or making a deal with suppliers to return redundant stock, the business owner is able to mitigate the losses.
Moreover, while it is not always possible to predict the arrival of a new product that is bigger and better, the data may indicate that diversification would make a lot of sense. It may point to an alternative that would be even more lucrative. Data analysis can help predict the shifts in the market. Large amounts of data will shed light on previous trends, how long they lasted, whether they were seasonal, when and why they changed, and give an indication of the likelihood of a recurrence.
Advertising
The internet and social media play a big role in the advertising sector today. More and more businesses are turning to social media to advertise. By analyzing the words and phrases used in social media, entrepreneurs can pick up on current trends, which lead to the identification of any number of business opportunities. This information may also show them where they are going wrong and what adjustments need to be made in terms of marketing strategy, product lines, and product quality.
Search engine optimization (SEO) is the use of keywords to target specific internet searches relating to a product. Interrogation of search engine data will indicate which words and phrases are the most used when people search for particular products. They give an indication of what words are likely to produce results when advertising on the internet or on social media.
Scenario analysis
The beauty of having so much data at hand is that analysts can simulate various business scenarios, using the information to create long-term strategies and react to current dynamics. This is possibly one of the most important benefits for entrepreneurs — having the ability to predict future outcomes and business requirements, backed up with relevant data. With the right tools, managers can determine future capital structures, cash flow, and capex needs.
By using variables such as tax rates, discounts, and growth rates, managers can predict best- and worst-case scenarios. This exercise helps them anticipate and plan for future uncertainty. By being proactive in this way, managers can avoid making bad business and investment decisions.
Scenario analysis, however, takes a great deal of skill and a thorough understanding of business management. The entrepreneur who has the advantage of a business analyst qualification will have the specialized knowledge required to use the tools and understand their impact when effecting the desired interventions in the interests of their business.
The impact of business analytics on a business
Not only does data analytics give business owners insights into their marketing strategies and future predictions, it also enables them to view their business as a whole. By analyzing data from the various departments and divisions, they can identify strengths and weaknesses in the organization and remedy them.
In a manufacturing environment, predictive algorithms can be put in place to determine the regularity with which machines break down. The algorithms put forward suggestions as to when a maintenance check or machine overhaul becomes necessary and will identify the particular vehicle parts that need attending to. This type of information has the effect of minimizing breakdowns and increases productivity in the long term.
Businesses can take action to increase their customer base, improve efficiency in operations or the accounts department, pay better attention to risk management, and gain insights into their marketing strategy. Business owners will gain more confidence in their decision-making abilities and get a better understanding of their business as a whole.
Investment decisions based on prescriptive analytics can offer extra support to those gut feelings that sometimes drive investors, giving them confidence to invest based on historical data and current trends, and proving once again that big data speaks volumes.
Analytics can pick up fraud in individual banking accounts by identifying a sudden spike in activity. The software will identify the account and make recommendations such as the immediate cancellation of credit or debit cards.
In the process of developing or improving products, prescriptive analysis can recommend certain modifications based on data obtained from market research and product test data.
Data analytics can help businesses to drive productivity in the workplace by reporting on employees’ performance and what produces results. Businesses can act on this information to increase employee wellbeing and in doing so, boost productivity.
Analytics and the future
We hope that we have inspired you, the energetic and passionate entrepreneur, to explore the benefits of business analytics a little further. Undoubtedly, in-depth knowledge of data in the context of business analysis can significantly impact a business’s continued efficiency and profitability. An online degree is achievable in terms of time and flexibility, and entrepreneurs can begin applying their knowledge immediately. Take the next step in becoming a business entrepreneur who is streets ahead of the competition and enjoys the ride.
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