Small business owners must now where an additional hat – the data scientist hat.
As small business owners, we generally wear all the hats. And if we’ve grown to where we aren’t wearing all the hats at the same time, we at least rotate through them a few times a month.
One hat that is becoming increasingly important – and scary — to wear is the data scientist hat.
Although data scientists come in many forms, with varied skills, a small business data scientist is mostly responsible for parsing through and analyzing data to present key findings about a business. The goal is to use data and the findings to address challenges, find opportunities, and ultimately, help a business save time and money.
While most of us don’t have the luxury of hiring a bona fide data scientist to handle these figures, there are a few things you should know and consider as you run your business and aim to become as efficient as possible in your business functions.
Here are a few data management challenges and tips for handling each.
1. Data Strategy: Do you have one?
The overarching and driving structure of managing data is a data strategy. A data strategy is essentially a roadmap that identifies how a company will collect, handle, manage and store content. While a data strategy can vary in its breadth and depth, a simple strategy explaining each component is vital.
As an example, I run a small fitness studio. We collect data through a third-party site and all of the collected data is stored within their platform. However, we have the capability to download reports and export content, such as email addresses and member lists. We do not, however, have the ability to access individuals’ financial information, e.g. credit card numbers, from the platform, which provides a level of security for our members and keeps us removed from that sensitive data.
We have implemented a barebones data strategy, which outlines who has access to member data, which computers can be used for downloading reports and how we use our mobile devices to access data. We also have restrictions on permissions for anyone who can log into our third-party site from the backend.
While this may seem like overkill for a five-person operation, we want to be careful with our data and know exactly who is interacting with it and how.
2. Data collection: What and how?
For the most part, there are two immediate questions that plague a data strategy and drive the roadmap.
- What data do you want to collect?
- How will you collect that data?
Since data collection can happen in various formats – print, digital and in-person — the means in which data is shared and collected is a serious concern. When dealing with sensitive and personal identification information, the outlet for collecting this should be secure.
Another example – credit card information is incredibly sensitive these days — especially with the recent onslaught of data breaches that has put credit information and identities in jeopardy. The rule of thumb is that if you don’t have to touch this information, don’t. Use online portals or a chip reading device that can be used directly in front of customers. Or use a merchant service that will process and encrypt data to ensure top-level security for these transactions.
3. Data storage: Where?
Once you have data, you have to store it. While data storage can be relatively cheap these days, you don’t want to use a service that doesn’t have bank-level encryption, has a bad reputation or no reputation at all.
Data should be stored through a trusted platform that can be expandable and scalable based on your company’s current and future needs.
For instance, data storage spaces, such as Dropbox and Google Drive, will allow you a certain amount of free space, then it will begin charging when you hit a certain threshold. This can be convenient since you may not want to invest in a huge amount of storage if it isn’t necessary, but you also don’t want to have to completely switch platforms when you grow.
The key thing to consider here is security. Make sure that wherever and however you store your data, it’s safe.
4. Data Sharing: Who?
After you solved the puzzle of data collection and storage, the kicker in putting data to work is data sharing, which can also be referred to as data integration.
Because so many of the best data storing programs are cloud-based – leaving data off your hardware devices, which can be a good thing — these systems are becoming smart enough to talk to each other and foster integration between programs.
For instance, with a program such as Neat, which is used to store receipts and expense data, the challenge used to lie in extracting that data and importing it into another platform, such as QuickBooks Online or other accounting platforms.
Since technology continues to improve, and these platforms keep getting smarter, data in the form of expense reports can easily be exported from Neat’s premium service to QuickBooks Online within a few clicks. From an operational and accounting standpoint, this could be a game changer, and it’s absolutely a timesaver, as it creates streamlined and automated workflows.
Another example is contact imports. If you use Neat or another scanning software to collect contact information, you want to be able to easily export these contacts into a CRM or email service provider (ESP) to manage your database. For our fitness studio, we use a couple-click process to import our opt-ins from the third-party site into Constant Contact for our monthly mailer.
5. Data use: When?
The last item in your data strategy is understanding when and how you will use your data. Understand the implications of using your data and ensure you have permissions for that use.
No one is particularly excited when they receive an email they never signed up for, or a charge they didn’t agree to. Be very careful about how you use the data you collect, and do not violate any of your data use policies, which should be publicly posted and available for anyone who is willingly offering up data.
Here’s a few additional considerations.
As you get deeper into your data strategy, consider the following:
- Data policy posting and enforcement
- Data hacks and responsibilities
- Data protection
Smarter and more informed data management can go from being the elephant in the room to one of the best business enablers you can unleash for your small business, so long as you do it right.