I lose things a lot. When I do, I don’t even bother to look for them. Anything of mine that I can’t currently find is somewhere where I least expect it to be. Now and again, I’ll stumble across things in the oddest of places, and rather than put it back where it belongs I’ll just make a mental note of where the thing is. There’s my Phillips Head screwdriver, I’ll say, and then the next time I need it I know I’ll have to retrieve from it behind the breakfast cereals. Of course, a week or two later, I’ll need the screwdriver and have no idea where it is. It’s not the best system. It makes it pretty hard for me to have to tackle projects around the house when I have no idea where the tools I need for the job are located. Ideally, I’d know exactly where the screwdriver is–I could even have a central place where I keep all my tools, in a box of some kind–and I’d never have to worry about its accessibility.
It’s the same with your data. You can’t just leave it lying any old place for it to work for you; it needs to be accessible. Not just by people, but by other software, too. In the past it’s been difficult for smaller companies with limited IT budgets to successfully organize and work with the information that a business generates every day. Accounting data was found within the accounting software, stored in a proprietary database file. Point-of-sale data was in the POS, customer data in the CRM, and if you needed something ASAP you were pretty much SOL. With all these different facets locked up in their own silos, tracking trends or synthesizing all the information was an exercise in frustration. Everything got exported to Excel and you banged your head against the desk because Excel is no way to run a business.
The 2013-2014 report on corporate insolvencies from the Australian Securities and Investments Commission (ASIC) sheds light on the effects of this kind of software model and–like Excel–it isn’t pretty. The report notes that the Top Two reasons for business failure boils down to: inadequate cash flow and poor strategic management. It’s not a lagging economy, or big businesses crushing small ones, or even a vast conspiracy perpetrated by the Illuminati against radical bookstores and organic food co-ops. It’s just that they ran out of money, most likely because of bad management. This may seem self-evident, but it becomes a much more interesting proposition once you realize that 81% of the companies that went under had less than 20 employees. Owning a business is essentially a nonstop competition; it’s survival of the fittest, and the weakest of the species is disproportionately represented by the smallest.
Now’s the point where I should toss out the rhetorical question–Why is that?–but I already answered it. They can’t–or don’t think to–get at their data to make better business decisions. It’s all over the place. I don’t think it’s a controversial assumption to say that the decision makers in a business have the best of intentions. When money is running low, they want to spend what’s left in the most beneficial way. But gut decisions have no place in a business, unless you’re a gastroenterologist. It’s not that small businesses didn’t have a way to store all their data, it’s just that legacy systems placed less importance on data accessibility than it did on saving it in the first place. In 2015, this is no longer an acceptable reason. Cloud software and open platforms have combined to make company data accessible and shareable from any of the software solutions they use. And business owners and employees can get at it from anywhere they are. With retail or hospitality, with a solid POS acting as the anchor to a larger ecosystem. Sales revenue and tax information auto-syncs to accounting software, along with customer information that’s also passed around to loyalty, marketing, and survey apps. Employee hours and performance can be tied to HR and scheduling apps while payroll info makes its way over to accounting. It’s a fluid system where relevant data isn’t just generated and stored but shared across the wire with another app that can actually point out its relevance. Consider the improvements that small businesses see when they go down this path, based on research conducted by MYOB with its clients:
- More than ⅔ of those who responded have said that it’s quicker and easier for them to chase down late payers. Getting people to pay for goods and services is a great way to increase your cash flow, don’t you think?
- MYOB Essentials customers report cutting their time managing sales and payments by 40%.
- Nearly ⅔ agree that staying in compliance with business regulations is much easier, saving time that would otherwise be spent doing non-essential (to the business) paperwork.
- Respondents report that they’re saving anywhere from 8 to 13 hours a month on data entry and bank reconciliations.
This is a lot of time that’s freed up to spend really studying how to grow businesses. Using reporting tools from within your POS, or exporting it to third party analytics apps, provides the insights needed to make smarter business decisions. Granular tracking of inventory can yield smarter purchasing decisions, reducing wasteful spending. See what time of day you see the most traffic and start creating ways to pick up traffic during other shifts. Or learn purchasing behaviors during busy times to maximize revenue and profit during that time. For restaurants, you can monitor your waitstaff’s performance, for example, noting which team members seem to have the quickest turnover correlated with the highest tips. These are the people you want to schedule during busy times, as they’re making your customers happy–and making more of them happy per shift than other staff. Through reporting you can see how much labor costs you for any given shift and compare that with revenue, identifying windows where you might need more staff, and others where you can cut back. If you see a certain window of time is actually a consistent money loser, you can tweak your shops business hours to more suitably fit demand. The ways in which you can harness all this data is entirely up to you, but the important thing is that it’s all there for you–wherever you may be. And unlike my Phillips head screwdriver, it’s always in the same place.