6 tips for start-ups on how to make the most of their data
Good use of data offers companies a host of benefits. Improved customer experience, better product decision-making and better planning are just a few examples. But managing large volumes of data can seem insurmountable, and employees can feel overwhelmed in their decision-making.
All businesses want to make the most of their data, but how do they go about it?
There are tools and strategies that can help start-ups get started and make the most of their data.
Choose the right tools
Rule no. 1: Say goodbye to manipulating thousands of rows and columns of data in Excel. Spreadsheets can be useful, but they don't scale well and quickly become complex. With teleworking becoming the new norm, version control can become very time-consuming. You don't want to sacrifice collaboration features, and you can't afford to.
More practical and advanced tools are available, so why not take advantage of them? You should consider equipping yourself with tools dedicated to storing or visualising your data, or other tools, to help your data scientists track resources and keep an eye on costs.
Financial reporting is a NetSuite feature that can be used for both accounting and sales management.
Use your data to talk about your business
Product strategy, brand identity, growth objectives: everything is organised efficiently so that the various stakeholders are well informed and know that the company is on the right track.
In other words, it's not enough to have an interesting story to tell: the management team also needs to be able to justify it. To do this, employees need to know how to present the brand as it is, while being able to adapt quickly to current events, good or bad. The people in charge of brand storytelling need to have the financial performance data and KPIs they need to justify it with confidence.
Integrate data analysis from the outset
It's imperative to use your data straight away. This will not only help you over the long term, but also make it easier to find investment. Investors like to have a long-term view of companies.
Present your data at the same time as your financial plans for the next few years. Investors absolutely must see that the company knows how to use its data. This will help you to illustrate current and future growth according to scenarios based on different data.
Without a good financial plan detailing growth plans and the data to track them, investors won't be able to make informed investment decisions.
USE your data
There is a recurring problem with data: most companies collect it, but very few know how to use it.
This is sometimes due to volume. Large companies find it difficult to identify and use their data because of its sheer volume. On the other hand, other companies do not collect enough data. Data must be collected even if no analysis project is yet in place. Sometimes the data will only be useful much later. But if data is not collected as it is collected, there will be no turning back.
Data analysis and management is becoming an increasingly systematic part of day-to-day business management. So it's easier to make the most of it when the time comes.
Impress your current and future investors
It's often difficult to convince investors without presenting them with figures. These figures need to show them where your company stands, but above all where it's going.
Investors are generally looking for a solid business model, and they want to understand what the different scenarios are (even if some events are a little harder to predict than others). By presenting them with different scenarios, you show that you have considered a number of situations, and that management is better equipped to identify warning signs and potential difficulties, and then respond appropriately.
You need to be able to understand what factors are impacting your business. Analyse customer behaviour and product development in terms of data. Keeping investors well informed about the decisions being made and the role played by data is an important step.
Sometimes, the people and tools responsible for collecting and using data will be chosen according to where you are in your growth. Investing in your data is not always necessary, but if you need to make complex decisions, recruiting the right people and equipping yourself with tools to source data may be necessary.
However, a team dedicated entirely to data is not necessarily essential. You can outsource the management of your data. Your in-house team will then only have to manage part of it, using appropriate tools. You can strengthen your team and the tools at your disposal as time goes by and your needs change.
Sort out your financial data before an IPO
Even if an IPO is not the first stage in the life of your company, it is often an ambition of many start-ups. It's never too early to prepare your financial data in line with IPO best practice.
Deploying financial software as you go along can be very costly. Decision-makers should bear in mind that current regulations prohibit them from making changes to financial systems during the IPO process, and again a year after the IPO has taken place. If you don't have a system in place that allows key stakeholders to access key data in real time at an early stage, your task is likely to be more complicated.
If you are considering an IPO, you should be prepared to provide at least 3 years of audited financial data. Investors will want to see reassuring debt-equity ratios, sufficient market capitalisation and reliable sales and earnings forecasts. Finally, you need to put in place various processes in the areas associated with turnover, headcount and other major expenses. Your financial infrastructure must have control systems in place to manage these processes, while being flexible enough to adapt to future changes.
Harnessing your data doesn't offer an absolute guarantee of results, but being well prepared and having robust systems in place will make things easier. Taking these steps and reinforcing them with an effective management system can greatly increase your chances of success.
Article translated from French