Let’s say you’re flipping a coin four times. The first three times, you get heads. Now, your gut might tell you that the coin is more likely to land tails side up on the final flip. This isn’t actually true. As it flips through the air and comes back down, there’s still a 50% chance that it’ll land heads again.
It might seem wrong. Your brain may struggle to rationalize it. But it doesn’t change the math.
That’s the Power of Data
Numbers don’t lie, even when we try to convince ourselves otherwise. Data is unbiased and unswayed, and that’s one reason why data is so crucial to your business. To be successful in a competitive business market, you’ll need some personal drive and gut-instinct. Intuition can be a powerful asset.
But left unchecked, it may lead you astray. Data will keep you grounded. That’s not to say it’ll keep you stuck in the past or hold you back. Far from it.
Data Can See the Future
Well, not exactly. But when you start comparing year over year data, you begin to see trends. Once you understand how the trends work, you can begin to estimate how the data will continue to play out. Before you know it, you have a mathematically sound glimpse into the future.
But that’s not all data can show.
Data Can Find Potential Opportunities
Zappos is a billion-dollar company, now owned by Amazon, that sells more shoes online than anyone else. This is something you probably already know. What you might not know is that they started largely off of data.
In the late 90s, a man named Nick Swinmum realized that footwear was a $40 billion industry in the US, and that at the time, 5% of all footwear was being sold through mail-order catalogues. That’s $2 billion for anyone not wanting to do the math.
Now, by the end of the 90’s, many forward thinking people were able to see that online commerce would be a big player in the future. So you combine that idea with the relatively simple data, and the opportunity is pretty clear.
Of course, that’s not enough to make a business succeed, but it was enough to secure $2 million in funding to get the business started.
Ultimately, Data is the First Step
Data doesn’t lie, but it also doesn’t act. It’s pretty inert. That’s where business financial modeling and planning comes into play. Using good data, a strategy can be built that puts the odds in your favor.
Don’t leave the success of your business up to how the coin lands. Let us help you plan for your future. Contact us today.