6 tips for start-ups to make good use of their data
The good use of data offers companies countless benefits. Improving customer experience, making better product decisions and ensuring good planning are just a few examples. However, managing a large volume of data can be overwhelming and employees can feel overwhelmed when making decisions.
Every company wants to make the most of its data, but how do you do it? There are different tools and strategies to help start-ups get the most out of information.
Choose the right tools
First of all, forget about manipulating endless rows and columns of data in Excel. Spreadsheets can be useful, but they hardly evolve and instead quickly become complex. With teleworking being the new norm, version control can be time-consuming and you can't afford to sacrifice collaboration capabilities.
Given that there are tools available that are practical and advanced, why not take advantage of them? Consider equipping yourself with data warehousing and visualisation tools or other tools that support your data scientists in tracking resources and monitoring costs.
Financial reporting is one of the NetSuite features that you can use for both your accounting and business 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 is not enough to have an interesting story to tell: the management team must also be able to justify it. To do this, employees must know how to present the brand as it is and, at the same time, be able to adapt quickly to current events, whether beneficial or not. Employees in charge of brand storytelling must have the financial performance data and KPIs to fully justify the brand.
Integrate data analysis from the start
It is imperative to use your data from the start, as it helps you to be stable in the long run. It also makes it easier to find investors, who like to have a clear view of the future of the companies they invest in.
Present your data along with your financial plan for the next few years. It is important for investors to see that the company knows how to use its data. This will help you illustrate the current and future growth of the company, supported by scenarios built from different data.
Without a good financial plan that details growth plans and the data that supports it, investors will not be able to make good decisions.
Use your data!
We have noticed a recurring problem with data: most companies collect it, but very few know how to use it. This is partly due to volume.
On the one hand, large companies find it difficult to identify and use their data because of the sheer volume they have. On the other hand, there are other companies that do not collect enough data.
Data must be collected even if you do not yet have an analysis objective in mind. Sometimes the data will not be useful until later, but if it is not collected gradually, there is no way back.
Data analysis and data management are becoming more and more recurrent and systematic in the daily management of companies. This makes it easier to take advantage of it when the time comes.
Impress your current... and future investors
It is often difficult to convince investors without presenting them with figures that reflect where your company is now and, above all, where it is going.
Investors are often looking for a solid business model and visualise different possible scenarios (even if some events are a bit more difficult to predict than others). By presenting them with different scenarios, you show that you have considered various situations and that management is able to identify warning signs and potential difficulties, and respond accordingly.
You need to be clear about what factors impact your business. Analyse customer behaviour and product development in terms of data. Keeping investors well informed about decisions made and the role data plays in this process is a critical step.
The people and tools responsible for collecting and then using the data are chosen based on the growth of the company. Investing in your data is not always necessary, but if complex decisions need to be made, it can be useful to recruit specialised people and equip yourself with the right tools.
However, a whole team dedicated exclusively to data analysis is not always necessary. It is possible to outsource data management, so that your internal team only has to take care of a part of it, thanks to the implementation of adapted tools. Over time, you will be able to optimise your team and the tools at their service as needed.
Classify your financial data before an Initial Public Offering (IPO)
Although going public is not the first step in the life of your company, it is often an ambition of many start-ups. It is never too early to prepare your financial data with IPO best practices in mind.
The gradual implementation of financial software can be very costly. Decision-makers should not lose sight of the fact that current regulations prohibit modifying financial systems during the IPO process and for up to one year after the IPO becomes effective. If you do not have a system in place that allows stakeholders to access key data in real time from the earliest stages, the task can be complicated.
If you are considering an IPO, you should be prepared to provide at least 3 years of certified financial data. Investors will want to see a good debt/equity ratio, sufficient market capitalisation, as well as reliable sales and earnings projections.
Finally, you need to establish different processes in areas related to turnover, personnel and other important expenses. Your financial infrastructure must have a control system in place to manage these processes, but be flexible enough to adapt to future changes.
Leveraging your data is not an absolute guarantee of getting the results you expect, but being prepared and having systems in place will make your job easier. Taking these steps and reinforcing them with an effective management system can greatly increase your chances of success.
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Article translated from Spanish