Around 20% of small businesses have to close their doors after their first year. There are many reasons this happens, but a common one is making mistakes with data management.
Every business needs to collect data about all of its transactions both from a legal and an operational standpoint. This data helps business owners keep budgets intact, make more informed decisions, and have a clear view of the business.
There are a ton of data management options available to business owners, but knowing how to handle it all can be overwhelming. We’ve compiled a list of the most common mistakes you should try to avoid.
- Giving General Access
It’s true that there are several positions within a company that will benefit from having access to any data collected, but it can also cause a lot of problems.
When no one is assigned to a job, it often goes undone.
That’s very true for data management, which is why it’s always very helpful to have a data management team. These individuals are the ones responsible for collecting, sorting through, analyzing, sharing, and storing the data.
Designating a team keeps things from getting confused or done multiple times. It gives clear importance to the tasks and ensures it’ll all get done.
- Scope Too Broad
We’ve established that data collecting is an important aspect of running a successful business. It can literally be the difference between failure and success.
But sometimes companies can take it too far and make it unnecessarily difficult.
It’s important to make sure that the scope of your data collection is in the right range. You don’t want to waste your precious resources (employee time and your money) collecting data that actually won’t make a difference for you.
In order to avoid this, it’s helpful to regularly inventory the data you’re collecting to see if it’s been beneficial or not. Then, adjust your scope based on what you find.
- Avoiding Specifics
Along the same lines, it’s crucial to get as specific as possible when collecting helpful information.
If your company has found that client profiles have been extremely important in planning product launches, you want to go as deep into that data collection as possible. Finding out all you can in that sphere to make the most informed decisions.
Some companies spend a lot of resources collecting a little about a lot when they should be doing the opposite.
It’s all about finding that sweet spot between too much and too little.
- Under Utilizing Aids
Knowing where to store data is a big hurdle many companies have to overcome. Many feel they need to develop their own system and then get very overwhelmed in the process.
Luckily, this just isn’t the case and there are plenty of options available for companies to begin using right away, like this environmental data sheet system that allows you to collect, sort, and store data in an easy to use program.
Spending time creating your own system is unnecessary and a waste of valuable resources.
- Lack of Vision
Collecting, analyzing, and storing data can seem like a very abstract concept. It can be hard to catch the vision for what this is supposed to do for the company.
It’s a big mistake to not help your whole team see the benefit of data management.
Training your employees on your data management procedures is an important step. But it’s also important to help them understand why this is so helpful. When people know the reasons behind their job requirements, it’s far easier for them to do it.
This is especially crucial in relation to those in management positions. Help them catch the vision so data management becomes more of a priority.
- Failing at Security
If you’re putting forth the effort to collect data for your business, you better also be putting forth the effort to protect it as well.
More than 60% of companies say their systems have potentially been compromised in the last year. That means all of their information could have been used against them simply because they didn’t have the right protections in place.
Setting up a cybersecurity system should be one of the first steps when starting your business. It just makes sense to do all you can to protect your assets, and that includes your data files.
- Ignoring the Data
The biggest mistake companies make in regards to data management is not doing anything with the data they collect.
What’s the point in knowing so much about your customer or your typical transactions in a month if you don’t make future decisions based on that knowledge. It’s a complete waste of effort and money to not use it to your advantage.
A data profiling strategy is a great tool to make sure that the data you collect is being used to influence your business’ next moves.
There should be a clear pattern of looking at, analyzing, and using the data for decision making.
- Keeping Everything
While it’s very important to keep solid, full records for your business, it’s also not necessary to keep all of it.
You’ll have to decide how long you want to store all of your data but it’s important to have regular cleaning sessions for old, outdated data. Without this, your systems will become overwhelmed and likely fall into disorganization.
Unorganized data files are worthless and just cause stress and anxiety. Avoid this by having a plan for what types of data can go after certain time periods.
This will also save you money in data storage fees as well.
Don’t Make Mistakes with Data Management
There’s a lot to worry about when you’re trying to run your own business. Mistakes with data management don’t have to be one of them.
You can avoid these pitfalls by setting up good systems from the start (or as soon as you finish reading this), regularly checking in with your systems, and training all employees to follow set procedures.
If you’re interested in learning more tips to making your business successful, check out our other articles!