Compiling Data – Do you have too much or too little?
At Skytale, we look at a business’s “data” in the same way a doctor would look at a patient’s vital signs. Financial data gives us clues about the health of a business. Many business owners use an income statement as their only data point, but our experience tells us that using several different data points will better serve us in understanding what’s working and meeting business goals. A doctor wouldn’t use only blood pressure to diagnose a patient, and we like to avoid using only one metric to analyze a business.
On the other hand, it’s easy to run into data-overwhelm. It’s easy for business owners to be so buried in numbers that the data stops being helpful altogether. Our clients who collect data with the help of platforms like practice management software (PMS) or customer relationship management (CRM) sometimes come to us with the problem, “There’s so much to look at—but what does it actually mean?” Others spend so much time plugging numbers manually into spreadsheets, they barely have the chance to analyze it in a meaningful way.
Whether the data in your practice is scarce or overwhelming, there are ways to ensure you are correctly gathering and deciphering the data available to you. We’re going to break down the three most common data-collection headaches our clients run into, and provide solutions to get them back on track.
#1: “I don’t have any data, so I can’t measure progress.”
If the data is scarce or non-existent then think to yourself, “What is important to my business?” It could be anything from:
- How many patients did I see today?
- What was my production per day?
- How much revenue did each patient generate?
- What were my monthly expenses?
- How did the new patients find us?
The list can go on and on and in different verticals of the business (i.e. marketing, finance, operations), but identifying the correct data to track is the key. A client who only wants to see their take home pay isn’t going to have the same return as a client gathering data around the revenue of each patient or how new patients were referred. We usually find that about eight to ten key data points, or key performance indicators (KPIs), should be tracked at least monthly. If you have the bandwidth to track them more often, you’ll have a good idea of where your business stands throughout the month so there are no surprises once the financials are published.
We believe creating a budget is crucial. A budget that includes your data points and KPIs can help to keep you on track. That way, the data you track month to month also becomes historical data that predicts the future of the business.
#2: “I compile data, but everything is manual.”
Quite often we see clients send over multiple spreadsheets worth of data that they have been compiling for years through monthly repetition. They don’t want to spend the money on a platform because they don’t want all the bells and whistles (and that is okay!), but they also can’t gather all the data they want to see because the staff is too busy. There are two options here:
- Bite the bullet and upgrade to a platform that can provide everything you want. The growth in the revenue from having current and accurate data should outweigh the cost.
- Review the data you currently track. Is it still relevant to your business? Things change quite often in a business and this might allow you to retire this process and pick up a new one that is more specific to the goals you set. This also allows your staff not to become overloaded with extra work if you are swapping out processes.
#3: “I’m overwhelmed with data”
If you are using a platform, you probably don’t have a scarcity problem; you have the opposite.
Many owners use platforms that consolidate all kinds of data, but a business owner can’t spend all their time clicking on each report to see what they have at their disposal. Most of the time it is overwhelming, and our clients will only go to the reports that are critical to the business. While time should not be spent literally clicking through each report, it’s important to know how each can help the business. Here are a few of our tips to help manage data overwhelm.
- If you skipped over the platform tutorials (like most of us do), it’s time to go back and learn. Then, teach your staff what you learned. Many platforms can provide exactly what you need to meet your business goals, but sifting through the data is the time-consuming piece. You need to breakdown all the data points that the platform is providing and identify the specific points that directly affect the business. Spending this time up front will save you so much time analyzing in the long-run.
- Once you know what the platform measures, use the data points to find patterns. For example, you can compare the number of patients seen daily, weekly, and monthly compared to the revenue brought in during those time periods. Maybe this allows you to understand certain demographics of patients that marketing can target more because some may spend more than others.
- Use the data to answer specific questions. It’s overwhelming to look at piles of data without a clear objective. Instead, consider a question you have about business, then use the data you’re tracking to help you find the answer. For example, if you are below your target revenue amount every week, use the data to identify why. Is it something that happens seasonally? Are your expenses higher? Has your productivity decreased?
Here’s the bottom line. The problem isn’t about having too much or too little data (although, we’re financial analysts, so we think the more numbers, the better!), it’s about having the right data. There’s no point in having data that isn’t helping your business or informing your strategy. There’s no point in tracking numbers that you don’t understand and aren’t helping you make decisions. That’s why we create processes and reporting around the specific data our clients require in order to allow them the freedom to watch their business grow.
Want to watch your business grow? Use your data keep to an eye on the pulse (and the blood pressure and the oxygen levels) of your business.