Data is very important in any business or endeavor. It’s great to follow your gut instinct, but at the end of the day, I want to see numbers.
You may have heard the Peter Drucker quote that “you can’t manage what you can’t measure.” If you’re not measuring, how do you know if you are progressing? You might be doing a bunch of work that you think will move the needle, when in fact you are spinning your wheels and stuck in place.
If you’ve ever done a workout program, you’ll notice that you’re encouraged to constantly take measurements and progress pictures so you can see how you’re doing. At a minimum, most programs will tell you to take measurements on the first day and on the last day of the program.
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Metrics in that area would include body fat percentage, how many pounds were lost, and how many inches you dropped on your waistline. You can’t just “guess” your way into shape. Similarly, trying to guess your way to success in business or other endeavors will likely end in frustration and failure.
I recorded a discussion with Grant Nichols, a co-founder of BluWave Analytics, who focuses on data analytics for clients. In our discussion, Grant gives a lot of great tips for beginner entrepreneurs and talks about how his company makes sense of data for clients.
I brought up my previous experience in oil & gas, where we’d have a report spit out 70+ columns of information from various reports… that data essentially would mean NOTHING until it was organized it in a way that told a story.
Once you create a view such as a chart or table that makes sense of the data, the picture can be painted. Is a certain product line profitable or is it losing money? What does the trend look like weekly? Monthly? Year over year?
Once you’re measuring and you know what the current story shows, you can implement tactical changes in your game plan and then continue to track progress. Maybe what you’re trying isn’t working, and it might be time to change the strategy a bit. Then give it some time and track results.
Think about this seriously. What data do you have available to you now that you are not taking full advantage of? Is there anything you have no visibility on that you should be tracking? If so, consider creating a database to track key metrics. Even if you have to manually track to start, just do something.
Ideally, tracking of data should be automated to reduce human error, but at the very least have some sort of Excel file. As you grow, you can invest in tools that collect data and allow you to export into a .CSV file to slice and dice.
For example, I use Zoho CRM to track real estate leads. I enter in all sorts of information such as client first and last name, address of the home, asking price, repair estimate, lead status, etc.
I can export all the lead data at any given point in time and then analyze from there to see which leads are still open, which ones I thought were done deals that fell through, etc.
If you try to juggle every important metric in your memory alone, you’ll likely be leaving a lot of money and opportunities on the table.
In any case, make sure to check out the video or listen to the podcast, and feel free to post any comments or questions below!
In this episode, Grant will talk about:
- How they were profitable on their first month of launching
- Making sure you are at the right networking events
- The importance of bouncing ideas off of mentors
- How failing is okay
- Creating a team that complements each other
“You can’t manage what you can’t measure.” – Peter Drucker
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