6 tips for start-ups to use their data
Good use of data offers companies many benefits. Improving customer experience, making better product decisions, and ensuring good planning are just examples. However, managing large volumes of data can seem overwhelming, as employees can feel overwhelmed in making decisions.
Every company wants to leverage its data, but how to do so?
There are tools and strategies to help startups get started and get the most out of their data.
Choose the right tools
Rule 1:Stop wading through thousands of rows and columns of data in Excel. Spreadsheets can be useful, but they evolve with difficulty and quickly become complex. With telecommuting becoming increasingly common, version control can be time-consuming. You cannot sacrifice the ability to collaborate, and you cannot afford to.
More practical and advanced tools are available today, so why not take advantage of them? You should consider having dedicated data storage or visualization tools, or other tools, to help your data scientists keep track of resources and control costs.
Financial reporting is a feature of NetSuite that can be used for both accounting and business management.
Dave Rosenberg, EMEA marketing and business development and private equity manager for Oracle NetSuite, says, "Go take an online data science course or something similar, because you can very quickly see gaps in your business where you don't expect them, whether it's forecasting, inventory or something else."
Integrating data analytics from the beginning
Using data from the earliest stages is critical. Not only will this help you in the long run, but it will also help you in your search for investors. They, in fact, often have a long-term view of the company.
Present your data along with your financial plans for the next few years. It is important for investors to see a company that knows how to use its data. This will help you illustrate current and future growth based on scenarios using different data.
Without a good financial plan that details growth plans and the data to follow them, investors will not be able to make informed decisions about their investments.
EXPLOIT your data.
There is a recurring problem with data: most companies collect it, but very few know how to use it.
This is sometimes due to volume. Large companies have difficulty identifying and using their data because of their sheer volume. In contrast, other companies do not collect enough data. Data must be collected even if there is no analysis project yet. Sometimes the data will not be useful until much later. But if they are not collected gradually, there will be no turning back.
Data analysis and management is becoming more and more systematic in the daily management of companies. This makes it easier to take advantage of it at the right time.
Impress your current and future investors
It is often difficult to convince investors without presenting them with figures. These figures should show where your company is, but more importantly, where it is going.
Investors are usually looking for a solid business model and want to understand different possible scenarios (although some events are a little harder to predict than others). By presenting them with different scenarios, you demonstrate that you have considered different situations, and that management is better able to identify warning signs and possible difficulties, and then respond appropriately.
You must be able to understand the factors that affect your business. Analyze customer behavior and product development in terms of data. Keeping investors well informed about decisions made and the role of data is an important step.
Sometimes the people and tools for collecting and using data will be chosen based on your growth. Investing in data is not always necessary, but if you have to make complex decisions, you may need to recruit the right people and have the tools to source the data.
However, a dedicated data team is not always necessary. It is possible to outsource data management. Your in-house team will then only need to manage a portion of it through appropriate tools. You will be able to strengthen your team and the tools at your service over time and as needed.
Choosing financial data before a takeover bid (IPO).
Although going public is not the first step in your company's life, it is often an ambition of many start-ups. It is never too early to prepare your financial data with best practices for takeover bids in mind.
Implementing financial software little by little can be very expensive. Decision-makers should keep in mind that current regulations prohibit them from changing financial systems during the takeover bid process and one year after the takeover bid goes into effect. If you do not have a system that allows key stakeholders to access key data in real time at an early stage, this activity may be more complicated.
If you are considering a takeover bid, you should be prepared to provide at least 3 years of audited financial data. Investors will want to see reassuring debt-to-equity ratios, sufficient market capitalization, and reliable sales and earnings forecasts. Finally, several processes must be put in place in the areas associated with sales, headcount, and other major expenses. Your financial infrastructure must have control systems in place to manage these processes, while being flexible enough to adapt to future changes.
Leveraging data is not an absolute guarantee of results, but being prepared and having robust systems in place will make it easier. Taking these steps and reinforcing them with an effective management system can greatly increase your chances of success.
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Article translated from Italian