BUSINESS COMMENT
Coast River Business Journal
April 2021 • 15
Tracking data
Successful business owners track and use business data
By Jessica Newhall
Clatsop Community College
Small Business Development Center
Looking at the world of commerce, we see an
ecosystem made up of companies of varying sizes,
business models, offerings and buyers with unique
needs, backgrounds, preferences and resources to
trade in return for the goods and services on offer.
If your imagination is particularly active, perhaps
you can visualize this as a giant bazaar of olden
times with bright colors and sounds, and own-
ers of each market enthusiastically hawking their
wares hoping to catch the attention and coin of
passersby.
Perhaps you can see, as the sun sets and the
market winds to a close, each market stall owner
tallying up the day’s take. Some will grin as they
find out they made enough to pay off the cost of
the products they sold, invest in new inventory for
the next day, cover the expenses incurred to main-
tain their stall and have something left to take home
to contribute to their living expenses or perhaps
even splurge a little. On others, you may see disap-
pointment register across their faces as they realize
their take was not what they had hoped.
Some owners, tired from the efforts of the day,
will shove the money in their pocket, close up the
stall and go home. Others, before they leave for
the day, will pull out a ledger and carefully enter
the day’s take — perhaps even counting and tally-
ing their inventory to see what they sold. A smaller
number will tuck that ledger into their satchel to
take home with them for review later. That night,
under candlelight, those dedicated stall owners will
pull out the ledger and pour over it to see what valu-
able insights the information held within might tell
them. This analysis could help them gain an under-
Jessica Newhall
standing of trends impacting their stall’s perfor-
mance. Perhaps they identify that one product is
selling better than others, or that a previously hot
product seems to be in decline, or that overall sales
seem to be increasing or decreasing.
It is from this point that the owner can start to
make informed decisions as to how to improve their
chances for success. They may decide to enhance
displays, replace products that are no longer selling,
make improvements to the sales pitch, improve the
look of their market stall to attract attention, find a
more optimal location for their stall or even bring in
an additional person to help with sales. This owner
will repeat this same cycle of tracking, monitor-
ing and analyzing sales information and, over time,
should be able to see whether these decisions had a
positive impact on the business.
In his book, “Zero to One Million: How to Build
a Company to One Million Dollars in Sales,”
author Ryan Allis describes the advent of the mar-
ket system as far back as 6,000 B.C. in Mesopota-
mia where tribes would barter with one another for
goods. Given this system’s unfortunate reliance on
a “coincidence of wants” that often didn’t match,
the money system was introduced around 2,000
B.C. and our modern economic model was born —
perhaps in a bazaar like the one described above.
One might argue that today’s small business
owners face a much more sophisticated economy
and complex business environment than the bazaar
model. Yet, when we look at this deeply, the real-
ity is that the basic principles of operating a small
business have not shifted as far as we would think.
Businesses still need to produce a product or ser-
vice and market it in a way that compels a buyer
to purchase it and business owners need to track
and analyze their financial performance to make
informed product selection, marketing, sales and
staffing decisions.
What becomes very apparent when looking
through this lens is that the decisions and actions
of the individual business owners themselves have
an extraordinary impact on their business’s suc-
cess. Going back to the bazaar example, if you had
money to invest in a business, which business owner
would you be more willing to risk your investment
with? The one who tiredly shoves the day’s take in
his pocket and then shows up again the next day
to repeat, in similar fashion, what they did the day
before hoping for a similar or better outcome? Or
would you bet on the one who put in the extra effort
to track, analyze and implement informed changes
to improve their business and product performance?
Likely your investment would go to the latter.
Today’s small business owner has much more
sophisticated business performance data readily
at hand than the bazaar owner of yesteryear, from
point-of-sale reports, digital banking records, finan-
cial performance tools such as QuickBooks, to the
internet where an extraordinary wealth of resources
and information on how to use data to make
informed decisions exists. Information overload can
certainly overwhelm, but it is a business owner’s
conscious choice to ignore performance data. This
decision can have real costs to the business, both in
terms of being able to effectively manage their busi-
ness and attract future capital necessary for growth.
So, if you find yourself at the helm of your business
and would like to improve how you track, analyze
and monitor your business performance, perhaps
start with one area of your business such as gross
sales, and expand your expertise from there. Need
help or have questions on how to get started? Talk
to your bookkeeper, CPA, banker or SBDC advisor.
Jessica Newhall is the associate director and
Small Business Management program manager
for the Clatsop Community College Small Business
Development Center. She can be reached at jne-
whall@clatsopcc.edu.
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