The Importance of Analyzing Your Business on a Continual Basis
The frequent and continual analysis of business performance is one of the most important duties in business. Business review helps one uncover an incredible amount of intelligence about what is working and what is not working. Without this type of review, it is difficult to asses a business’ true health. This is because without business reports, the best thing you’ll have to rely on is your best guess. Making business decisions by guessing can lead to lost opportunities as well as a lot of stress. Making informed decisions leads to profits and happiness.
There are many types of reports you can look at. I list just a few examples in this post to give the reader an idea of where to start. I’m sure in your own business you can come up with many creative types of reports to generate and review.
Looking at sales reports may be an obvious suggestion but its incredible how often people skip this task because they are too caught up in their day-to-day business tasks. Looking at sales reports is a useful way to stay on top of your business. It lets you see what is selling well. It also identifies some “diamonds in the rough” that may get overlooked. For example, you may identify certain products beginning to sell more frequently. Having this trending information early will allow you to quickly make decisions on securing more inventory and forecasting for the future.
Try generating and comparing sales reports from one week to another to see what jumps out at you. Often you’ll find certain trends that lead to important business decisions. Other times, these reports may help you make minor tweaks in your processes. The benefits of reviewing sales reports are endless. Having intimate knowledge about your business’ sales performance is vital to success so it should be a top priority. For example, make it a habit of knowing each week’s top five best selling products.
Another useful report to look at are inventory reports. Try to analyze your inventory levels for each product from one period to another. This is very helpful because it lets you see what is moving but, more importantly, it lets you see what is NOT moving. Inventory that is not moving is just money depreciating on your shelves. I like to think of products that aren’t moving as items that are keeping your money hostage.
Site Analytics Reports
You have to follow your site’s analytics religiously or you run a huge risk of letting things go out of your control. Google Analytics is a great tool for small business owners. Some useful things to monitor are trends related your site’s unique visitors, page views, time spent on your site, your bounce rate, the most frequent exit pages, your best keywords and the best traffic sources. There are literally thousands of metrics to monitor on your analytics account. The point is to monitor the trends so you can make intelligent business decisions.
Monitoring analytics related to online advertising is equally as important. You should closely look at your pay-per-click advertising, your comparison shopping engine spending and any other type of advertising that you do. Once I made the mistake of procrastinating on monitoring our Google Adwords account. This ended up costing us thousands of dolars that could have been avoided if I had examined our spending on a more frequent basis.
I have only touched upon a few of the types of reports one should review in the course of running a business. The point is to look at one’s own business to determine what types of reports provide important information for making decisions. Without business intelligence, you’re just flying by the seat of your pants. Make the effort and review your business’ performance closely. You’ll be better off in so many ways. Not only will you be making informed decisions about your business but you’ll be a lot less stressed because you won’t feel like you’re always guessing.