Data Science for Small Business: Make Your Business Smarter

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Data Science for Small Business: Make Your Business Smarter

SMEs or small and micro enterprises form an integral part of a country’s economy. In India alone, the sector is said to have employed around 111.4 million people in the year 2014, and in 2012 it contributed 37.5% to the GDP. But, the irony is that even after being such an important part of the economy, SMEs are not able to flourish as they should have. There is a major lack of strategic business planning and innovation that hinders their growth.

In order for the SMEs to remain competitive both nationally and globally, it is imperative that every SME owner investigates the lacuna and starts working on it. Developing economies such as ours often find it difficult to foster innovation in the SME sector, because there are other factors that need the government’s attention.

The major problems faced by SMEs include unskilled staff, irregular finances, poor infrastructure, old marketing strategies and lack of information.

An SME owner tries to tackle all the issues but neglects an important one. This factor is “information”. Even after having skilled people, a good flow of money and good infrastructure the business may cease to flourish as expected by the owner.

The Real Lacuna

The basic problem that SMEs face is the lack of data resources, they do not know how to collect data and put it to good use. You can also say that SMEs are unaware of the fact that “data” needs attention too. Along with this they also lack a true understanding of data science or data analytics.

Even if they start to think about utilizing the small amount of data that they possess, they are not sure if that has that big data analytics dimension that can offer good results.

Most of the time SMEs deal in only one domain which further restricts their view towards recent trends in the market allowing them to work traditionally. Because of this attitude, they often tend to hype data analytics as a management trend rather than a perspective opportunity.

The SMEs who try to go for data analytics, give up because they are not able to afford the needed infrastructure or data analytics expertise that is needed. Another major concern faced by the SMEs that refrains them from utilizing analytics is data protection and privacy.

Data Science To The Rescue

Data Science for Small Business

With fast-changing technology, the world is becoming data-driven, and data is utilized to extract every bit of information that can take the business to the next level. The field is referred to as data science and the professionals are called data scientists.

Big Data, Data Analytics, and Machine Learning are all a part of this field and are being utilized worldwide to do wonders in the cooperative world. For small and medium enterprises, data science can do things beyond imagination.

When an SME owner recognizes the potential hidden in data analytics, success becomes definitive. Using data science tools the SMEs can generate knowledge from the stockpiled data and incorporate innovation into their business.

Firms’ past performances and market behavior can be analyzed to uncover new insights. Data science may help SMEs to face the challenges they thought cannot be overcome. The data-driven decisions made at the micro-level may help small business owners to improve their position in the market.

After conducting a data science operation a business owner may find a correlation between factors that he always neglected. The insights generated may help the business owners to deeply understand their existing potential with respect to the present competition.

Data Science for Small Business

Micro, Small, and Medium Enterprises (MSME) are often frowned upon by the big players when it comes to the business world, but MSME is the backbone of any country’s economy. From constituting a major part of the country’s GDP to generating employment for millions, MSME is the underrated star in the business world. 

According to MSME ministry data, India has approx. 63 million MSMEs and contributing to 29% of India’s total GDP. Not only this, as the government is turning more focus towards MSMEs, there has been a significant increase in MSME numbers.  With MSME, the growth of analytics services has also increased significantly.

Unfortunately, though MSMEs are gaining traction in the formal aspect of business, still they are yet to manage the data efficiently. Due to a lack of funds, resources, and training often they are confined to running it based on traditional methods, ignoring the immense power of data science and analytics. According to McKinsey’s study, with technology implementations, 20% of the bottom line can be ramped up and that’s all MSMEs need to survive, sustain, and grow. Data Science can be the much-needed rescue option here.  With data, MSMEs can take crucial business decisions that can help them take the next steps in growth perspective and give the big competitors fierce competition.

MSMEs can take the help of data science vendors to fulfill their requirements of implementation. They can guide them and provide the necessary solutions as per the budget of the business.

Why do Small Businesses need Data Analytics?

For any business, data-driven decisions hold the key to success. From launching a product to customer feedback to operational efficiency monitoring – if data is harnessed properly, it can do wonders for businesses. Small businesses need data analytics more than anything as one right decision at the right time is all they need to succeed and grow. 

The few areas where data analytics can be helpful are – 

Understanding the Demographics

Understanding the market sentiment and demographics are the two most crucial factors for a business. Unfortunately, most businesses can’t even find the right demographics. Small businesses get affected the most due to this limitation. With data analytics in place, MSMEs can identify the right segment, apt demographics for their product or services so they can deliver quick wins for the business. 

Client Acquisition Cost Analysis

Acquiring a new client isn’t a cakewalk and small companies also buckle to pay their savings into this. While having multiple digital marketing strategies is good, does it yield results always? Not necessarily! Understanding the metrics and KPIs such as pay-per-click, cost-per-lead, and many more help businesses take the right decision in the face of uncertainty. If the strategy isn’t a profitable one, then it can be tweaked, or even scrapped at the right time rather than spending a fortune there.

Meeting the Seasonal Demand

Seasonal demand is like the sweet cherry pie for businesses. Every organization loves it but is unsure about its nature. What sold like hotcakes last year, might be completely outdated this year. Customers’ tastes can be completely unpredictable. Data analytics is the savior. It’s the detailed understanding from the dataset that separates a winner from the crowd. 

Competitive Analysis

Understanding the market is important and so is keeping a tab on the competition. If it can be tracked what the competitors are targeting, which market they are after, and what kind of purchase order they are getting, it would be a goldmine to take the next business decision to stay ahead of the competition. MSMEs can leverage this data to beat their closest competitors.  

Product Offering Enhancement

Designing the product that customers need, is the game-changer in this fiercely competitive world. Certain times, though organizations do have ideas, the execution turns out to be ineffective. Or even worse, launching a product that no one needs. Such mistakes do adversely impact the financial stature of the organizations and for small companies, it can wreak havoc. Having a solid in-depth view of customer understanding can influence the product designing process. 

Recruiting the Right Talent

Talent is a scarcity for each company. Finding the right talent for the job is tougher than winning a lottery. Big companies can allure candidates with different packages and perks, but small companies can’t always do so due to budget crunch. By keeping a tab on the market scenario and the talent segment, they can make an informed decision regarding hiring and retaining a candidate and providing multiple flexible models.

How Are Small Businesses Using Data?

The emergence of data science led to paradigm shifts in business models throughout the industries. Traditional modes are getting injected with the relevant information to sustain the turbulence of the modern world. Small businesses in different sectors are leveraging data in their ways – 

Manufacturing Sector

The manufacturing industry has revolutionized with data. Supply chain management used to be the biggest headache for managers but now with the right data at hand, they can make an informed decision. Whether tracking of products/ materials is properly done or not, demand properly forecasted for the right number of quantities – is not a concern nowadays. Data has taken care of it.

Financial Sector

Fintech startups are disrupting the market with their power of harnessing data. Understanding the pain areas of customers such as complex regulatory laws, cyberthreats, low transparency and lack of trust puts them ahead of the competition. 

Healthcare Sector

Healthcare startups are vastly reliant on data. How the patients behave, smart screening solutions, disease life cycle, and its impact – everything is being monitored under the ambit of data analytics. Small businesses are now even competing with giants based on data analysis capabilities.

How Can Small Businesses Leverage Data Analysis?

Small businesses are at the forefront of the technological revolution. They now have the access to the biggest weapon- data for running a business successfully. A few pointers they can keep in mind are –

  • Understanding the issues first with the right data set is the key. 
  • Small businesses can always avail of publicly available data. With more data sets available, it can make a more accurate and insightful analysis. 
  • While analyzing, keeping an open mindset is important. The main purpose of data analysis is to understand the hidden insights,  and not to get trapped in bias confirmation.
  • Partner with the right data science consultancy firm to ensure 360 degrees of data management.

The Professionals Are Here

The implementation of data science in SMEs requires a preliminary assessment of their maturity regarding the strategic use of data in their everyday processes. In order to accelerate its development and implementation, SMEs can always consult field experts.

At DataToBiz you will find a combination of technical as well as domain knowledge which is essential for the employment of data science. With their expertise, you don’t need to worry about data security and privacy. Right from data collection to the final processing, the professionals at one of the leading data science firms like DataToBiz will be there to assist you and do their best to improve your business’ presence in the market.

If you have any queries related to data science implementation in your organization, feel free to contact us!

Data Science & Analytics

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