On a lighter note, the word statistics is deliberately cancelled in the heading - we don't want to scare anyone here! 😃 Let's now move to the story of the day.
Regardless of your business type, virtually every business is driven by statistics (or we can simply call them business measures). Let us start by detailing the importance of business statistics.
Statistics help your business to grow by assisting you in making the right decision at the right time.
How can you improve what you can't measure? A straight forward answer is availed to us by none other than business guru, Peter Drucker, "You can't manage what you can't measure".
If you read further -beyond this article- on this subject, you will realise that there are lots of these business measures. However, we chose to focus our attention on a few below which we feel make more sense to the small business owners.
Important statistics in business include:
1. How much did I invest in this product?
This information will assist you in pricing your product right, taking note of your expected profit and also competitors pricing.
2. How many sales did I make in the period under review?
This information assists you in your future budgeting. Sales (and expenses) for the next period may deviate greatly from this one but this measure is far much better than those wild predictions we usually make!
3. Which age group buys my products the most?
3. Which age group buys my products the most?
This information makes you able to serve better your customers based on age groups. You will get to find out which additional value added services to top up to each particular age group - cost effectively - which is commensurate to the profit they contribute towards your business.
4. Time-related statistics.
You have to note down times at which significant things happen in your business and make business wise decisions. For example;
- time of the day/ month/year when you make most significant sales.
- time of the day/ month/year you make the least sales.
this information is particularly useful for timing when to get raw materials/ business inputs and timing your products/ business outputs to meet customer requirements. For instance, it wouldn't make much sense to cook larger quantities of food after lunch time if the bulk of your sales take place during lunch time or stocking large quantities of ice cream during the winter period.
5 . Quantity related statistics.
These include;
- the most sales you have made or rather an average of your best sales
- the least sales you have ever made or rather an average of your worst sales.
This information is particularly useful for restocking purposes. You wouldn't want a situation where you overstock (thereby tying your cash in capital) and also understocking (resulting in your usual clients resorting for service elsewhere). Hence, a balance has to be struck between the above-mentioned extremes based on the historical quantity related statistics.
The above points may seem like basic common sense, but are you taking note of these. Assess your business how it performs before and after you incorporate the above measures in your planning and see the difference.
We guarantee you positive results if you consciously take note of the above measures in all business decisions you make!
Feel free to add other business statistics you feel we have left out in the comments section below!
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