Why Some Businesses Choose Not to Use Their Data
The reasons that small businesses neglect to put their data to beneficial use in the ways discussed in this article are various and complicated.
The purpose of this section is to help you understand why you have not yet found the motivation to take advantage of your data rather than to pass any judgment. The aim is also to encourage you to move away from any hesitation that you may have.
1. It’s Too Expensive
Many small businesses have small budgets and regard databases as too expensive. They believe that they have to pay an expert to create databases. However, the software itself is not expensive and open-source versions are often available.
For example, MS Access may already be available on the version of MS
Office you are using. And some open-source software suites have database packages available, such as OpenOffice and LibreOffice.
Concern may also arise that new and expensive hardware is necessary. There are many options, not least of which is a database stored in the cloud, which requires minimal investment and maintenance of office hardware.
2. It’s Too Disruptive
If a company is running smoothly there may be a concern that implementing a database would disrupt the status quo and cause a falloff in business. There may be apprehension that a period of time would arise when it would not be possible to take any orders.
The physical move to a database from other methods of electronic storage is not as difficult as you might think. For example, there is usually a fast method to transfer data between databases and spreadsheets and most electronic data can be quickly manipulated to the point where it can be presented on a spreadsheet.
A sensible way of starting is to choose an area of your business to place onto the database so that everyone can get used to the nature of the new technology. For example, you could move a spreadsheet about your customers’ contact details onto a single table in the database and allow your employees to become used to accessing and manipulating
Once everyone is familiar with the first table, you can import more
spreadsheets into additional tables. It is worth noting that a spreadsheet and a database can be used alongside each other until all employees are comfortable.
You must ensure that updates are only made to one of the files and then transferred to the other so that changes are not overwritten. The most obvious method would be to make changes to the spreadsheet and then transfer the changes to the database at regular intervals.
Such a transfer can be completed with a few simple instructions known as an update query. In this way the spreadsheet keeps operating as normal, but employees can open the database to see how the data is stored and can become familiar with accessing it.
3. It Will Take Too Much Time
As in all aspects of life, only you can answer the recurrent question, “How bad do things have to get before I will make a change?” If you are using paper files and running around your office in a panic every time a customer contacts you, searching for a file, it makes sense to improve your efficiency.
You do need to invest the time to learn about databases, but this is ultimately less than the time you will waste if you continue to work with out-of-date systems. You can implement the database in small steps, as described in the previous paragraph about disruption.
The decision comes down to a balance between investment and reward, and it is up to the individual business to decide where it sits on the spectrum of possibilities.
4. It’s Too Difficult to Learn and Implement
It may seem daunting to learn about databases when you haven’t used one before. But, if you are already using word processing and spreadsheets, the step up to using a database is not as great as you might think.
Check the book below, it will help you set a number of small goals and make steady progress.
5. It’s Too Low on the Priority List
Running a small business can be overwhelming, with long hours and little time to keep organized. You may have a long list of things you would like to sort out before attempting to focus on your data.
It can seem like a long-term goal and, like any long-term goal, it is easy for it to become overshadowed by more short-term plans.
To improve the functioning of your business, you may be inclined to focus on what could be higher priorities, such as taking steps to improve the ways in which you manage your office, keep records, and store your products and supplies.
Only then will you feel in a position to look at your data. However, if you were to begin with your data it is likely that many of the other parts of your business would require careful organization for the process to work effectively. This is because your data often reaches all areas of your business such as your customers, your sales, and your inventory.
6. A Failure to Anticipate How Quickly the Business Would Grow
When a business starts it is usually possible to recognize each customer by name. Simple filing systems will suffice. However, there is a point at which customers are not instantly recognizable: generally speaking, this will occur when numbers rise above the 50 customer mark.
In most instances, a small business will want to keep its service as personalized as possible. A database can enable you to keep your service personalized even when the number of customers grows. This is because data retrieval is highly efficient.
For example, important data about customers’ preferences can be kept with their records so that this data can be accessed quickly when a customer contacts the company.
7. A Failure to Understand How Valuable the Data Can Be to the Business
Many small businesses do not understand the value of their data in terms of leveraging their profits. The data held by your small business has the potential to increase revenue by providing helpful information, increasing the number of customers, and improving the customer experience.
Managers may be happy to make decisions on the basis of their past experiences, intuition, or comparison with other products on the market. Using data from the database allows this process to move from guesswork to precise market planning, thereby making small businesses more competitive, particularly in relation to their larger, more database-savvy counterparts.
In some cases, a small business may be operating perfectly well without a database. For example, if you own a café with regular demand for a fixed set of items that you buy fresh each day, you may well be operating from direct observation.
If you notice that you are low on salt and pepper, you could easily
drive down to the store for more. It is not straightforward to keep records of your customers.
However, you could make records of what is selling each day, what the weather is like, and what events are going on in your town, and then use this information to improve your sales, tighten your profit margins, and introduce new products.
This information is particularly important when you have competition—say, a new café opens across the street. It is never a good idea to turn a blind eye to your data.
Additional Useful Resource
This book is written with complete database beginners in mind, with an
assumption that you have experience of spreadsheets. The book shows you how to create a database from scratch, all the way through to analyzing the data and presenting it in reports. Click to Download
The aim is that you can build the databases presented in the book and use them as a test suite to experiment on.
Four case studies are considered throughout the book. The aim of these case studies is to provide a good variety of small businesses.
The examples are:
- A small online business selling greetings cards
- A small engineering business
- A small legal firm
- A small non-profit business
Even if your business is, for example, a legal firm, it is still worth reading the other examples as well. The important point to remember is that databases are not difficult to learn. If you are familiar with spreadsheets, it is only a small step to using databases.