Data is unprocessed information, such as facts and figures. Information includes data but can be more comprehensive. It may be an interpretation of data with insights, or a way of organizing data. While data is made up of neutral input, information is the output that occurs when someone makes sense of the data. To fully understand the workings of your business, collect data about sales and operations and then build on these numbers by putting them in context and transforming them into information.
Some Examples of Data
The number of Facebook followers your business attracts is useful and informative data, as are the reactions you get for specific types of posts. If your posts include links, you'll also be interested in data measuring how many people click on these links and whether they buy once they do so. Sales figures provide data telling you which of your offerings are top sellers and which aren't moving. You can also collect data about operations, such as number of units produced per hour and materials cost per unit. Employee hours and gross payroll are also examples of data, as are number of customers served per hour and the average amount per sale.
Using Data in Your Business
As you turn data into information, you learn about what works and what doesn't work in your business. By comparing the responses to different social media posts, you can gather information about what kind of content creates emotional connections with your customers and post more in that vein. Social media data can also tell you the best time of day for posting content and receiving quality responses. Sales data tells you which products to have on hand and in what quantities. Production data can provide useful information about which products and services to promote. If the numbers tell you that it costs half as much to produce a shirt as it does to produce a pair of pants that you can sell for the same price, it makes sense to devote marketing resources to promoting shirt sales because this brings in the biggest profit. By gathering data about production processes as you tinker with variables, you may glean valuable information such as which batch size is most efficient.
Collecting Business Data
You may be overwhelmed by the sheer volume of data available to your business. When you receive input about everything from price fluctuations to weather patterns, it can be difficult to distill meaningful output.
Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.