Business Intelligence And Entrepreneurs: The Shocking Truth
What is Business Intelligence?
Let’s start with a simple business intelligence story.
Several years ago, I had a blog. Not this blog. A different blog.
That blog sucked. Well, the traffic sucked. The articles were actually pretty great.
I wanted my blog to do better because I thought it was a great blog that many people could benefit from.
And I admit I also wanted to make some money.
There, I said it.
After cranking out dozens of articles with little increase in traffic, I decided to do some analysis on my site.
I started studying the traffic in my Google Analytics report and noticed that articles about certain topics were getting more traffic, had a lower bounce rate, and were shared more frequently.
With this helpful information, I started cranking out more articles related to that same topic. And lo and behold, my traffic began to increase.
Check it out below.
As you can see, it didn’t skyrocket. I didn’t go from making pennies a day to living on a beach in the Virgin Islands.
But, I learned something valuable about my audience and potential customers.
I used data from my website to make an intelligent decision that brought positive results.
And that’s what business intelligence (BI) is all about.
You could go with the complicated Wikipedia definition which goes something like this:
Business Intelligence (BI) are the set of strategies, processes, applications, data, technologies and technical architectures which are used to support the collection, analysis…
Blah, blah, blah.
That’s making me sleepy just looking at it.
Let me bottom line it for you.
Business Intelligence is taking data from your company and using it to make decisions to achieve your business goals.
Business Intelligence and Solo Entrepreneurs
Proper use of BI is an amazing way to improve your business. But there are many obstacles that keep a solo entrepreneur from taking advantage of business intelligence.
- Most BI tools are complex and difficult to understand and use. Even Google Analytics (yes, that is a BI tool) can be daunting at first glance.
- A solo-entrepreneur is just that: one person. If you’re running a business by yourself, then you usually don’t have the manpower, or the time, to properly dedicate to a BI tool.
- Chances are you already specialize in something. You may have also learned a few more things (accounting, inventory, Excel, web design, etc.) along your entrepreneurial journey. Do you really want to add learning BI to that list?
Despite all these legitimate hurdles to utilizing Business Intelligence, I’m gonna level with you.
It is crucial to your business success that you figure something out. You are missing out on so much potential, if you don’t have some sort of BI strategy.
And that’s why this website exists.
To help busy solo-entrepreneurs like you get the most out of business intelligence without going crazy or learning an entirely new discipline or investing in some ridiculously expensive software solution.
You can do a lot with the various tools already at your fingertips. And in other articles, I’ll show you how.
But for now, I’m going to do my best to convince you that you absolutely need to start thinking about a business intelligence strategy for your business.
With that, here are the top eight reasons solo-entrepreneurs need business intelligence.
1. Understanding the Past
This is usually where BI starts. You analyze data from the past to understand why certain things happened.
Perhaps it was something good. Perhaps it was something bad. Whatever it was, you can use that information to make smart, intelligent decisions.
Let’s say you analyze your Google Analytics reports and notice there was a traffic spike last month. This may be because you wrote an article that attracted a lot of attention.
Or perhaps it was because someone influential shared your article on social media.
On the flip side, what if you checked your analytics and realized there was a sudden dip?
It would be important to know if that dip was permanent or just a standalone occurrence.
If it was a unique event, then you can may want to investigate to prevent it from reoccurring in the future.
But if this dip led to a permanent decrease in traffic, that could be an indication of something more important.
It could be a broken page or poor user experience on your website.
2. Understanding the Present
While understanding the past is important, you really need to know what’s happening right now. Where does your business stand in the current moment?
- Are your products selling the way you expect them to?
- Do your marketing efforts bring you the results you hoped for?
- Perhaps you’re spending too much (or too little) on certain aspects of your business?
A good business intelligence strategy will allow you to analyze how your business is doing right now. This information will give you the ability (and the agility) to make immediate decisions that can bring immediate results.
The right data can help you discover if a product or service you’re offering is bringing you the sales results you expect.
This data might also help you know if the sales are as profitable as you’d like them to be.
The good thing is, much of this data is readily available. Most accounting software packages offer standard reports that will give you some insight into these trends.
Others offer add-ons that can give you even deeper information.
Even if they don’t provide these solutions (in which case you may want to consider a different package), just about every accounting solution will allow you to export some or all of your data to Excel.
Once you have it in Excel, you can manipulate this data to get the information you need.
3. Predicting the Future
Once you know the past, and you’ve got a handle on the present, you should probably start preparing for the future.
Business intelligence can help you with that also.
In fact, you should use data from the past, and data from present trends, to guide your decisions in the future.
For instance, perhaps you’ve learned from past data that certain products sell better during certain seasons. You might already have an intuition about these sales patterns just from your knowledge of your industry.
But having that data in your hands may help to verify your gut instincts, as well as provide surprising information you weren’t aware of.
With this information, you can schedule or prepare for the next season’s product offerings.
BI might also help you discover trends that you can exploit to your advantage in the future. Perhaps you’ve learned that certain demographics are expressing interest in some of your products that you did not expect.
You can use this data to adjust your product offerings and marketing efforts.
4. Empowering Your Decisions
There’s nothing more frustrating than making decisions on faulty, or incomplete information.
Granted, no matter how much data you have, and no matter what tools you use, you will never have complete information.
But a good BI solution can help give you an edge and help prevent error.
Having access to the right data is so much more valuable than just going by your gut. Having this data can validate your gut, or perhaps show that it was wrong the entire time.
With the right data, you can make informed, intelligent, and insightful decisions.
You can have the numbers and statistics to back up your decisions.
And if you make a mistake, which is inevitable, you can use this data to make the necessary corrections.
5. Tracking Your Goals
Your business should have some sort of goals. Many businesses use the term, KPI, or key performance indicators.
These are number or benchmarks you set to measure your business’ performance and success.
For example, you might have a goal of 50,000 email subscribers in one year. You figure that if you got at least 4200 new subscribers per month, you’d easily reach this goal.
Breaking it down further, you can calculate that would require 1050 subscribers per week, and thus you set a KPI of 150 new subscribers per day.
I know this is a simplified example, but it’s easy to follow.
Now, of course you won’t get 150 subscribers every day. Some days you might get 50. Others you might get 200.
With a business intelligence tool, you should be able to track how many subscribers you’re getting daily, weekly, and so on. You can track if visitors to your website are signing up, and if not, what’s keeping them from signing up.
Furthermore, you can use BI to figure out if they stay signed up.
A few years ago, I had an email list with a sequence that I thought was pretty good. But after analyzing the stats, I learned that a lot of people were dropping off after the 14th message.
I realized there was something about that message that was turning people off and prompting them to unsubscribe. I tweaked that message and almost immediately, the unsubscribe rate decreased.
6. Gaining New Insights
Of course, you know your business. You know your industry. And you know your customers.
I get it.
But you don’t know everything. You’ve gotta admit, there has to be room for improvement in your business.
A business intelligence strategy will help you discover those hidden gems you never knew existed. It will help you find the opportunities you wouldn’t normally see because you’re in the trenches, too busy running a business.
Any good entrepreneur knows that there are unknown opportunities out there. There’s some customer, somewhere who would love what they’re offering.
I’m not saying BI will bring in a flood of new customers overnight. But it will give you a good chance to find the potential profits that you might be missing out on.
The thing is, there’s no way to know what’s out there until you go looking. Like one guy said, there are known knowns, known unknowns, and unknown unknowns.
7. Consolidating Data
This is one of the biggest problems and benefits of business intelligence.
If you’re a solo-entrepreneur, you’ve probably got data all over the place. We’ve already mentioned at least three places where a good chunk of your business data might be.
- Google Analytics – Your web traffic data
- Email Marketing Service – Your email data
- Accounting Package – Your day-to-day business data
It’s rare that all of these different databases are stored in one place. And it’s not really easy (or cheap) to get them to one place either.
But with a good strategy, you could potentially use these disparate data locations in a beneficial way.
This might require exporting everything to Excel (very cumbersome, but cheap). This is not the most elegant way and definitely won’t work for large enterprises.
However, a small solo-entrepreneur might find this useful.
There are also BI tools that you can use to bring some of these databases together into one location, making it easier to analyze.
8. Leveling the Playing Field
Whatever industry or business you’re in, almost certainly there’s a bigger player out there. Chances are, they’re using BI to their advantage.
You probably do not have the resources or the manpower to extract, analyze, and interpret the data to the same extent as a big corporation.
But, with a sound BI strategy, you can level the playing field between you and the big companies.
Without a doubt, big businesses are using data (that’s probably why it’s called big data).
And they certainly have the resources to purchase expensive business intelligence tools and hire the right people to use them.
Even though you may not have those same resources, you can still use BI to great advantage. And using BI will give you some of the same information the big corporations have.
And just think of your competition that are at the same level as you are. If they’re not using BI, that gives you a significant advantage.
Final Thoughts On Entrepreneurs and BI
Hopefully these points help you to understand the importance of BI and how you can use it in your solo venture. Admittedly, there are lots of problems with using a business intelligence strategy that are not easily overcome.
That’s when you have to consider if the obstacles outweigh the potential benefits. Will using BI allow you to make the decisions that will improve your business?
Almost certainly, it will. The question is, how will you implement BI in your business?
Do you agree? Disagree? What’s your opinion about business intelligence and solo-entrepreneurs?
Leave your comments below and let’s discuss!