As a business owner, you have to make critical decisions every day. And it’s easier to make the right choice when you have the best information, right at your fingertips.
That’s where business intelligence tools come into play. They enable you to both predict the outcomes and consider the risks of various options so you can make a more informed choice.
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What is business analytics?
Business analytics is the practice of collecting data from multiple sources and then turning that data into insights that help you improve the way you manage your business. Analytics software helps you better understand what’s working and what isn’t, so you can create strategies that help your business grow.
What does that look like in practice? Let’s say you’re tracking your daily sales through a business analytics tool and you see that you’re busiest on Saturdays, Sundays, and Mondays in the mid-morning and early evening (see below). That could inform how you staff your shop, set your hours, and even stock inventory.
Specifically, these tools can help with some of the following business tasks:
- Forecasting and budgeting
- Performance tracking
- Increasing productivity
- Identifying trends
- Identifying issues
- Improving your customer experience
- Improving supply chain efficiencies
So the more data you have — and the better your business intelligence tools allow you to parse through and understand it — the easier it is for you to make those important business decisions.
(If you’re doing research on different types of business analytics tools, you might also come across the term “business intelligence.” What’s the difference between business analytics and business intelligence? Business intelligence, or BI, is the category that analytics sits under.)
Data analytics is just one part of business intelligence, which incorporates predictive analytics and statistics to sift through data. Business intelligence software then makes connections from that data so business owners have an actionable plan to improve their operations.
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4 types of analytics tools for small business
Business analytics tools can be a game changer for your business, especially if you’re just starting out. They can shed light on everything from how, what, and when you’re selling to who is engaging with your brand and everything in between.
Here are a few types of intelligence tools with analytics capabilities that you should have in your business owner toolbox:
- Web analytics
- Web analytics tools show you how many people are visiting your site, how they’re getting there, and what they do once they’re there. If you have an online store, understanding how your customers interact with your site is crucial for maintaining and growing sales. Google Analytics is free and one of the most commonly used analytics platforms, although your website builder may also have built-in, high-level analytics.
- Social media analytics
- If you’re doing any of your marketing on social media, it’s important to understand how people are engaging with your content. Each platform has its own native analytics, which provides a lot of detail, and most also include detailed reporting tools. Social media analytics software like HootSuite or Buffer provide an aggregated view across your accounts.
- Point-of-sale analytics
- Analytics within your point-of-sale system digests all your transactions into reports that are easy to read and act upon. Square Point of Sale allows you to see sales trends over distinct periods of time, by product category, by location, or even by employee.
- Customer analytics
- A customer relationship management (CRM) tool lets you store customers’ information so you can communicate with them. And you should be able to glean insights about your customers from those communications and marketing activities. For example, you should know what kinds of email they are more likely to open. If you have a CRM that integrates with your POS — or if your POS has a built-in customer directory like Square — then you can also paint a picture of their buying habits. Square POS allows you to identify new versus return customers, as well as average spend per customer.
How to select business analytics tools: 6 questions to ask
When you’re deciding which business intelligence tools are right for you, you want to use the same set of criteria when evaluating all the possibilities. That doesn’t mean you use the same criteria to evaluate social media tools as you do for web analytics. But you should use the same questions for all the vendors you’re evaluating in a single category.
Begin by making a list of all the contenders for each type of business analytics tool, then ask a few questions:
- What is my goal in getting this intelligence tool? What specific insights do I want from it?
- What is the cost? Or better yet, what is the expected return on this investment? Is there a monthly charge and/or am I charged by the user? Can I try it free first?
- How easy to use is this analytics tool? How long will it take me to learn it and then train employees on it?
- Where is my data stored? How do I access it? Do I need to be on desktop, or can I access it on mobile?
- Does it integrate with the other business intelligence software I already use?
- If the tool works for me now, will it also scale with me as I grow? How will it scale?
Once you’ve determined that an analytics tool fits your needs, then cost and ease of use are the most important factors to consider.
There are plenty of low-cost options for analytics (Square POS is free and includes analytics). But not all business analytics tools are easy to use, so make sure you demo the product before you buy.
Accessing business analytics with Square
Business intelligence software is essential for small business owners because it can help you make more data-driven business decisions. Square Point of Sale has integrated analytics and advanced reporting options so you can discover important insights to improve your business.
Whether you need updated information on sales trends or inventory, if you’re using Square POS, you can pull that directly from your online Square Dashboard. Get started with Square POS.