Predictive Analytics for Small Businesses

If you could always accurately predict the future, your business would be the most successful in the world. But you can’t so that, so you are left with the next best option – using data to put together a predictive analysis. Even though this isn’t always 100% accurate, it will put you ahead of most other small business since the majority of entrepreneurs still rely on intuition.

While intuition has led to huge success in business, those instances happened long before we had the technology that is available today. Now we are able to use computers to learn from past experience in order to create business processes that function much more efficiently. Small businesses must learn how to pull actionable data from the troves of information that we collect every day.

It all starts with data quality. Data quality is the most important part of predictive analytics. After all, basing important decisions on faulty data can have devastating consequences. With that said, predictive analytics will allow you to mine data that shows you exactly what clients are searching for.

Predictive Analytics Helps you Set the Right Prices

Correctly pricing products and services is an area where a lot of small businesses have problems. In many cases, they undervalue themselves and end up charging less than they should. Predictive analytics can help you learn exactly what prices will convert the best in your market while also ensuring that you are not undervaluing yourself.

For example, ecommerce stores will gather data pertaining to the behaviour of customers in order to adjust their prices in a way that matches their competitors.

Plus, you can use analytics to compare technology to make sure that you’re up-to-par with the competition. Competitors will sometimes be able to set prices lower than you because they have invested in better technology. So if you have to charge more, then you know that you’ll need to add something unique to the mix to set your business apart.

Decrease Risk Through Analytics

Risk management is essential to the growth and sustainability of small businesses so predictive analytics can serve as a huge advantage. Data breaches are a great example here. All online-based businesses have the risk of data breaches. Gathering information based on past cyber-attacks helps you prepare for possible scenarios. It also allows you to discover ways for those breaches to be mitigated.

Naturally, predictive analytics will not save you from every risk but it shows you possible outcomes based on the past experiences of other businesses. Therefore, you can better prepare for the times when adversity strikes.

In fact, you can even use big data to help discover potential risks that might have never happened before. This is how large corporations are able to quickly respond to new threats while everyone else is still standing around scratching their heads in confusion.

Big data is a powerful asset. It’s important that small businesses leverage data so that they are prepared for all possible scenarios. Thankfully, data is no longer limited to large businesses. Cloud solutions have created a level playing field.

How to Implement Predictive Analytics

It’s one thing to talk about predictive analytics but you will need to actually put it into practice. Here are some easy tips to get started. Make sure that you take all of the following items into consideration.

  • If leadership is plagued by poor decisions, the who will be held accountable?
  • What type of decisions does your business need to make on a consistent basis?
  • What resources do you need to invest in to be able to start putting predictive analytics into practice?

Remember that the cost of making bad decisions far outweighs any potential investments that you might have to make.

Guest article written by: Jacob Haney is a content marketer presently working with Research Optimus, a business research outsourcing company. A writer by day and a reader by night, he is loathed to discuss himself in the third person but can be persuaded to do so from time to time.

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