This is going to hurt me more than it’s going to hurt you, believe me. I simply did not choose a career as a writer because I wanted to spread certain economic gospels. As far as I’m concerned, “economy” is a filthy, dirty word. The human spirit is practically bursting with a vibrant energy of creativity, a certain something that Americans think the French call joie de vivre. There has always been a narrow segment of the population that has none of these qualities, a joyless lot doomed to spend their Fridays alone. In the prehistoric era, these people were known as “food.” But today, in our postmodern, post-industrial global village, we call them “economists.” And if any of them are reading this, they’ll tell me that everything I’m about to say is a gross simplification of economic theories that take years to study and master. To which I respond: probably. But so what? I’m not writing this for them, and if they’re so smart why are they even reading my thoughts on anything to do with money? I don’t even keep a household budget.
No, this post is for you—the small business owners, the cafe operators, the boutique clothing purveyors, the people who are just trying to earn a living by doing or selling the things they love. You’re the first to be squeezed on price, the first to feel the adverse effects of a big box store putting down roots in your town. When you’re a one shop family operation, competing with the big guys can seem impossible. Much of the reason behind this has to do with economies of scale, an economic theory that states the more bloated an organization, the more likely it is to break a scale and crush everything beneath it. This is a good time to mention that any discussion of economics here is for entertainment purposes only, and you should always consult your family’s economist to make sure if Keynesian theory is right for you. In any case, as the little guy, you’re in danger of being crushed by the giant’s scale. And that’s why it’s best to just step aside, let the giant do his thing. I’m not saying to close up shop and call it a day, just that you don’t have to compete. Do your thing. And do it the way they do it, with the best technology available to help you make smarter decisions about your business.
You’re never going to get the price breaks that Cap’n Thrifty’s Bargain Shanty gets. What has changed is that it no longer matters whether you can afford the hardware and software required to get the same level of business intelligence they’ve got. Because it’s not just that old Cap’n Thrifty pays less per unit, he’s also got data and analytics to help him understand exactly what he needs to buy, how much of it, and when. The simplest result of this is that it ensures he’s not overbuying—this not only minimizes loss, but maximizes profit. Now is the part where I type some variation of the sentence, “And this is why the cloud is so great!”
Find out more about Kounta’s Retail Point of Sale Software.
Having a cloud-based POS means that you’re free to just run your store and not worry about the software and its infrastructure. But it also means that you can get access to some solid reporting tools to help you better understand what’s going on under the covers. Even the most basic reporting is going to be better than none: the time saved in accounting makes it worthwhile. But as cloud software becomes more common, the economies of scale start to work in your favor. More people buy in, services become cheaper. With higher volume of revenue, developers can keep tinkering and improving. Fast forward to the future—which is happening right now—and small businesses can collect the same kind of data, and run the same kinds of retail analytics on their own operations that bigger companies have been using for years. Small business owners can now harvest the Ones and Zeros of their livelihood—sales histories, customer preferences, seasonal purchasing behaviors, suppliers, costs, revenue—and reap all kinds of information that they hadn’t been able to access before. It’s like Big Data, but smaller, and it gives the independent shop a new level of visibility into their supply chain. Retailers getting these kinds of insights are going to make better purchasing decisions. And for hospitality, when your inventory is refrigerated and perishable, the steaks (HA!) are even higher. Timing and quantity is key.
But, Dave, you’re saying, we’ve already been storing our data and have the tools to analyse it.
To which I say, Shhhhh. Let the grown-ups talk.
Back in 2011, after roughly two decades of people hating Excel but using it anyway, Bloomberg Research and SAS put out a paper entitled the “The Current State of Business Analytics” (and surprisingly not subtitled “WTF Are You People Thinking?”). In the paper, a graph shows that 70% of respondents who said they’d increased their reliance on analytics were doing so with Excel. This is a bit like committing to learn how to juggle and then starting with chainsaws. Sure, it’s possible things will go as you planned, but one tiny mistake can spiral into a bloody mess. Forbes reported back in September on various studies that show nearly 9 out of 10 spreadsheets contain errors. In the context of analyzing data, where the spreadsheet is likely to have a whole mess of formulas referencing different cells, that means a single typo can propagate out into a proper goat rodeo in no time. Yes, typo, because while you can automatically generate a spreadsheet with certain data from apps, you’ve got to manually update it. And let’s be honest: people are the last kind of folks you want handling your critical data. If people were so smart, they wouldn’t have invented computers. (Don’t chew on that sentence for very long. It was written by a human, and probably means nothing)
In 2011, the cloud was gaining momentum but had not yet achieved the ubiquity it has now. Maybe even as recently as then, Excel was the cost effective solution for increasing business intelligence. But this is 2015, and you don’t even need to spend extra to get access to these kinds of Insights. There are companies out there offering best-in-class POS systems for as low as $50 a month that include these analytics at no charge. If you ask me, that’s a real game changer. Small businesses are better equipped to forge their own path and run efficiently with big business tools.
Viva La Little Guy!