Needs, like food, air and water, are basic human requirements to survive. Small businesses like humans have needs to survive.
One of my peers in the Master of Data Science program at Northwestern University suggested to me that there was nothing more important than generating new business. Early this year, I founded my own business to provide data solutions to small businesses. For the past six months, I have been hopping around networking events to meet small business owners and those similar to me in the IT and data science industry. These business owners are entrepreneurs who have been in the business for many years or who just started. They have individual business priorities, but most of them look for new businesses. Small businesses need new businesses to survive.
Although the basic needs for humans to survive in some countries and regions are still in shortage, in the modern society, living longer and having healthy life have become more important than surviving. The needs of modern society have evolved. According to Centers for Disease Control and Prevention (CDC), the right preventive care at every stage of life helps Americans stay healthy and lead productive lives.
While humans with healthy lives can live longer, the healthier the businesses, the more sustainable and the more successful they are.
However business owners know that new businesses are needs for small businesses to survive, like the food for humans, many business owners do not believe that business analysis is a need for a small business to be sustainable and successful. Easail International Trading Company was founded five years ago in Shanghai. During the start-up years, its priority was to sell more products to survive. As a small business, it could not put in extra effort in many aspects, but it applied business analysis to set Easail apart from others. In order to continue succeeding and be sustainable, they routinely analyze the business. They monitor the operations, watch competitors and lay out yearly projections. In 2017, the revenue increased by more than 30% from the year before, which was much greater than the average in the industry. Its sales cost growth rate was reduced from 208.61% in the second year to 9.83% in 2017. The company has also expanded the business to multiple major cities in China.
International Institute of Business Analysis president and CEO Kathleen Barrett presented a keynote on the importance of business analysis at the Building Business Capability 2011 Conference. She stated that “change is one of the biggest challenges facing organizations today, and the key to change is business analysis.” She stressed that “doing business the way we used to simply doesn’t work anymore.” Although I do not agree that doing change can ensure ongoing success, I do support that change will lead to success when it is the action from a result of business analysis.
Many small business owners do not analyze themselves or believe they need to. Some do not study their successes and failures. They are not informed about the reason why they are able to survive. According to the data posted on Small Business Administration, 48.2% of small businesses survive five years and 33.5% of them survive ten years. If small businesses want to prevent failure and be successful, like humans need preventative services to live longer and be healthy, they need business analysis.
Next blog, “How to analyze business in data era?”
Reference:
a. Philip Kotler, “Marketing Management”, 2000, Prentice-Hall, Inc, pp 11.
b. CDC, “Preventive Health Care”, September 15, 2017, https://www.cdc.gov/healthcommunication/toolstemplates/entertainmented/tips/PreventiveHealth.html
c. Kathleen Barret, “Business Analysis: The Foundation for Business Success”, 2011, http://www.iiba.org/Careers/Careers/business-analysis-foundation-for-business-success.aspx
d. SBA, “Survival Rate and Firm Age”, https://www.sba.gov/sites/default/files/SurvivalRatesAndFirmAge_ADA_0_0.pdf
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