One of the leading reasons small businesses remain is the failure to convert business transaction data into actionable information accurately and timely. Failure to capture the data on a transaction at the time of the transaction results in lost information because the data will quickly evaporate into nothing if it isn’t captured and recorded.
Business-specific information is valuable because it can affect behavior, a decision, or an outcome. A piece of information is considered valueless if, after receiving it, things remain unchanged.
One of the driving reasons why substantial businesses remain substantial is they use the transaction data flowing through their businesses to feed their business intelligence system (BIS) to know what’s working, what isn’t, and what needs to change to realize their goals.
Business intelligence will never exist until you develop the ability to convert the transaction data your business creates into information you can develop insights from to make decisions. Failure to convert data to information robs you of the ability to know if your business is on track to make money before it’s too late.
Without a business intelligence system, you are much more likely to spend more on COGS, SG&A, and other expenses than you ever intended. If you want to spend less to make more money, the first thing you need to do is to tighten up your process for ensuring your weekly business transactions are accurately recorded. Do this, and you can start using your financial statements to make better decisions.
Recording business transaction data in your accounting system is the start of creating business-specific information. This information is valuable because it can affect behavior, decisions, or outcomes.
Business intelligence is how you know if your business is on track to make money before it’s too late.
Business leaders develop insight from the information when knowledge in the form of perspective, understanding, deduction, or act of seeing into a situation emerges. Again, managers who are good at analyzing their business reports see things that need to start, stop, or continue in their business. Those who don’t analyze their business data reporting never do.
Once informed insights are developed, smart managers will use what they learn to make informed decisions. A decision is nothing more than a choice made between alternative courses of action in a situation of uncertainty. The best decisions are made through business intelligence that reduces uncertainty.
Next week, learn how to use the information you have to create a business intelligence system so you can know with confidence if your business is on track to make money before it’s too late.
If don’t want to wait and are ready to identify where your business needs, you most click here to take the no-obligation business assessment to confirm what you need to get better at by learning what you are doing well and where you need to improve to make the money you want to make.
Those who complete the BusinessCPR™ Business Assessment have less management uncertainty and confusion because they can better see what they need to start, stop, and continue so they make more money with less stress.
