Analytics Unleashed: Harnessing Predictive Power for Scaling

The power and potential in analytics can best be found in the company that wants to scale. This is because the data points will be able to tell you a great deal about what you need to do in order to either expand your market share or possibly open up a new location (specifically, the best place for you to choose.)

At this point, you might be wondering, what type of data are we talking about? Well, data can be anything from income statements to statistics about specific categories in your business, to addresses and phone numbers. In fact, I would actually argue that all of the above can and should be viewed as data. The more data points that you can have at your disposal, the more accurate your information will be at the end of the day.

Another key consideration is to be open for your analysts to have as many variables in their analytical work as possible. To you, this might translate into more digital reports that need to be submitted (obviously, finding ways to prevent it from becoming onerous is important.) However, to the analyst, each variable enables them to account for different scenarios, thereby helping to create a tiger, more accurate model for your forecasting.

One important point to consider on this area is finding out if it is possible to develop a statistical model from your data that would show how much work is required per sale, as well as what the average sale would be (sale here refers to the business transaction, and can and should be applied in whatever terminology your industry uses). By defining this, you can then see what the typical week currently looks like. However, it can also show you that, based on a substantial increase in factors, what the resulting business would look like.

What should become apparent, then, is that effective analytics can create models for using in scaling. This information can be translated into what you would need to increase your marketing budget to, as well as how many people you would potentially need to hire to accommodate this increased workload. From budgets to income forecasts, the power of analytics is almost limitless on these points.

How then is the most effective way to move forward? This is where if you have assembled a good team (analysts, Controller, and CFO), you will be able to get these plans developed quickly and effectively. Most importantly, they will probably know what to do, so you won’t need to ask them for specifics. Simply, let the professionals that you have hired do the work, and they will be able to provide you with the answers here.

However, this doesn’t mean that ignorance is blissful on this point. One problem that many owners and C-Suite’s have on this issue is viewing numbers as being almost like magic. It is anything but that. It is its own language, and learning how to speak it will help you better understand the principles being discussed. You will likely better understand the strategies that are being advocated, as well as gain a deeper understanding about the importance and weight of the recommendations.

Just because it is someone else’s job doesn’t mean that you should not try to understand it. At the end of the day, their expertise with numbers will enable them to see relationships quickly, reach conclusions and recommendations faster, as well as feel much more comfortable crunching numbers than you ever will. They will always be the expert, but understanding their expertise and language will help you go a long way in making sure that everyone can benefit from it the most.

The challenge with analytics is that it is very much a hard skill. Therefore, unlike other concepts that this newsletter has handled before (essentially soft skills with necessary competence in writing), this skill is something that you need to not necessarily learn, but one that you need to learn what to expect from a competent professional. Focus on leading the company and let your subject matter experts inform you of the direction that you need to pursue.