Small Business Data Analytics: Starting Without a Data Scientist

When you own a small business, it’s normal to feel intimidated about data analytics, especially if you know very little about this topic. 

However, data analytics are essential for making informed decisions, improving customer satisfaction, and even growing your business. 

The best part is that you don’t need to invest in a data scientist right away. You can thrive when you focus on basic metrics, choose user-friendly tools, and follow a practical framework adapted to your business. 

Here’s how to get started. 

Basic metrics to consider first

The crucial aspect of data analytics comes when you understand which metrics you need to track first. 

If you measure too much at once, you can’t prepare focused actions, and things quickly become overwhelming and unproductive. Focus on those metrics directly tied to your business goals first. 

Consider these:

• Sales metrics: you can understand your financial performance thanks to these. Think revenue, sales growth, and average order value to start with. 
• Customer metrics: retention rate, customer acquisition cost (CAC), and customer lifetime value (CLV) can help you understand how you attract and, even most importantly, how you keep customers. 
• Marketing metrics: with the right marketing tools, you should measure website traffic, email open rates, and social media engagement. These give you a good insight into how your marketing efforts are helping your business. 
• Operational metrics: a few important ones are order fulfillment time, inventory turnover and employee productivity are great for day-to-day operations.

Keep a close eye on these areas, and focus your efforts on strategies that deliver results in them. You’ll watch your business grow. 

How to implement data analytics

If you have a better idea about what to measure but don’t know where to start, this is what you should prioritise.

1. Choose the right tools

When you’re off to a good start, analytics are much easier to implement. You don’t need to spend a lot of money, and you don’t need the latest and most advanced software: there are plenty of user-friendly options you can get for your small business. Spreadsheets, CRM systems, website analytics (remember, Google Analytics is free!), and automation software can be a great investment. 

2. Have a system to collect data

If you want to make informed decisions, you need to be consistent with your data recollection, and it has to be reliable. Small businesses make up 85% of establishments and employ 54% of workers in rural counties in the US. Don’t underestimate how important you are to the local economy! 

For this particular aspect to consider, you can use forms and surveys or integrate sales platforms to automatically log transactions on your website. Track all your marketing campaigns and even your organic strategy. Review analytics reports once every month. 

3. Invest in data security

Your business might be small, but it manages a lot of data. Unfortunately, small businesses are often targeted by cybercriminals. In fact, . 6-in-10 small businesses claim they’re concerned about cybersecurity threats. It’s crucial to protect your customers' data, as well as the confidential data from your business. 

For this, you can get a VPN, but how does a VPN work? 

Essentially, these encrypt your internet connection and hide your activity from everyone else. With the right security tools, you can protect your customers and build trust and reputation with them. 

Decision-making frameworks

Once you have all your data collected and organised, you need to plan your next actions with this information. Follow a structure for your decision-making process, and make sure that your efforts pay off. 

Step 1: Define the problem

Start with a specific issue you want to tackle first, like what product sells better and why or how to improve your customer retention. 

Step 2: Analyse the data

Review your metrics and try to discover the patterns that bind them. You can look at customer feedback if you want to improve your customer retention, for example. 

Step 3: Come up with solutions

Brainstorm solutions with your team, especially for customer pain points. Consider streamlining certain tasks, or giving your customers more options in terms of shipping and delivery. 

Step 4: Test and measure results

Track the impact of your decisions in a small scare first. Use your data to determine whether or not the idea is working, and if it is, fully implement it in your business. 

Step 5: Repeat the process

Data analytics isn’t something you do just once; it’s an ongoing, important process in your business. Refine your strategy, adapt, explore new tools, and revisit your metrics whenever you make a change for the customers. 

Final thoughts

Your small business doesn’t need a data scientist from the get-go, but don’t underestimate the power of data analytics if you want to grow it. 

Use simple tools, focus on the right metrics, create a structure for making informed decisions, and scale your solutions progressively. 

Don’t forget to also prioritise data security and set your business on the path of sustainable growth. If you’re consistent, you’ll see the impact of your choices in time.