- Data is now easier to collect and cheaper to host, making it accessible to nearly every business.
- The availability of data helps small businesses compete against big corporations, but they may still struggle to use that data in practical ways.
- Three ways small businesses can use big data to grow include checking on credit data about your business, monitoring supply chain data, and keeping an eye on artificial intelligence and automation innovations.
The correlation between the availability of actionable big data and the size of the company with access to it is evident. It might not have been as detailed or accessible as it is now, but having access to information on competitors and customers has historically given large corporations an even greater advantage over small businesses than they already had because they could handle the costs and access the technology and resources.
Over the past decade, however, data has become more accessible to small businesses. Thanks to technology, it’s both easier to collect and cheaper to host, giving virtually every business access to an abundance of data that can be put to good use.
When my credit company first entered the U.K. marketplace, for instance, the average cost per domestic business credit report was 50 pounds (roughly $62). Now, that cost is about 50 pence (close to $0.63). Businesses today can even subscribe to data brokers instead of paying separately for each individual report they want.
Business models are changing, and people are finding different ways to promote their data services. Businesses are taking more creative approaches to making data available, using advertising and “freemium” offerings to widen their reach. And with that said, people are also more educated about the availability of data, which snowballs into it being more widely accessible and widely used, too.
Local governments in the U.S. are also helping to make credit data more readily available. After 9/11, Know Your Client rules became a standard practice to ensure vendors, bankers, and investment advisors knew as much as reasonably possible about their clients’ financial status and risk tolerance.
Further, as the U.S. government ends its reliance on Dun and Bradstreet’s proprietary DUNS number for credit data, business identifying information is only going to become more available to everyone. This greater access will undoubtedly help small businesses find creative ways to reach their business goals and compete with organizations that are twice their size.
Small businesses can now look at similar or competing businesses all over the world, use information about them to find customers, and then determine how to get a product where it needs to be based on those things.
This is a major shift since the days of being able to only access information about local or regional businesses, and it allows these businesses to prospect and identify good customers. They can also access information about any company they might be thinking about going into business with, reducing their risk of starting a new partnership blindly.
People start their own businesses because they have a passion for or talent in something. But when they go out into the world and get started, they realize there are a lot of other tasks that aren’t part of that initial vision. Those tasks could involve legal issues and making sure the company is incorporated, or they could include tax issues and making sure the correct taxes get paid. They could even be related to HR challenges in finding the right employees to hire. Whatever the issue, there is almost certainly a data solution for it.
With data so widely available, small businesses have more of a chance than ever to go head-to-head with big corporations. The challenge they now face is utilizing that data in practical, effective ways.
How can you use data to accelerate your business growth?
Many small businesses have already figured out the value of data when it comes to tracking customers and competitors and deciding which businesses to form relationships with.
Here are three ways you might not have considered to use data in your business to meet your goals and stay ahead of the competition:
1. Look at yourself first.
Typically, the No. 1 reason small businesses fail is cash flow. Any bump in the road or financial hiccup can not only drain your resources but also make it more difficult to secure cash when you need it. Data can play a part in ensuring your credit report remains healthy and your flow of cash doesn’t dry up.
Before you dive into analyzing competitors or customers, see what the data says about your own business. It’s crucial to manage your credit and see what’s on file about you across all of the relevant credit bureaus. This is massively important, as even one bad report can impede your ability to secure a loan with favorable terms. Check Dun & Bradstreet, Experian, Equifax, and any other business credit reference agency to ensure the data is accurate. If it’s not, work with each to correct misinformation and ensure you’re on the right track.
2. Monitor supply chain data.
Once you’ve got a handle on your own credit, the next step is getting more information about the partners you rely on every day to do business: your supply chain. If your supplier is unreliable or goes bankrupt, it can easily cause a domino effect with the potential to do lasting damage to your small business. Further, building up a relationship with a new supplier can take time, causing your customers and cash flow to suffer. Even if you secure a new supplier, its terms might not be as favorable as with the one you had previously, which could change the cost dynamic entirely.
A recent example is the trade war with China, which is causing a number of supply chain headaches for a variety of businesses. Even companies that don’t directly rely on a Chinese supplier might be buying from a supplier that gets its parts from China, which still causes significant disruption to their supply chains.
To approach your relationship with your supplier in a smart way, pull reports for suppliers, and monitor every element of your supply chain continuously. This can give you a valuable forewarning when something is headed in the wrong direction or a supplier is moving toward downsizing, acquisition or bankruptcy. Recently, reports surfaced about children illegally working long, arduous shifts to build Amazon devices and meet production quotas. Actions like this pose a serious risk to company reputations.
3. Keep an eye on automation and artificial intelligence.
Automating common tasks has proven to cut costs in terms of time and money, as well as provide a substantial return on investment. In the same way that only big corporations were pulling data reports 25 years ago, the biggest companies are now using sophisticated AI tools to make smarter business decisions and sprint ahead of everyone else. The good news is that many of these tools are becoming more readily available to smaller and midsize companies.
Be on the lookout for ways automation could create shortcuts for your business, specifically when it comes to analyzing data and putting it to use. This is the thing that will truly let you compete and set you apart. In the near future, there might even be tools to help you find vendors that are the perfect fit for your company.
For businesses, more data means more opportunities, knowledge and competition. If you want to take advantage of the power data can give you, determine what your goals are and find the right information to help you reach them faster. Data is no longer there for only those who can afford it – it’s there for anyone who seeks it out and puts it to good use.