Why Stats are Important for your Business

Why Stats are Important for your Business
May 15, 2019 Kevin Devoto
In Business

Statistics contributes a lot to the success of any business. Of course, every company wants to be quick and accurate in decision-making. Successful business people know what their customers want and are aware of the quality to produce and in what quantities. Statistics enable tech startups to plan production based on the taste of their customers. You can even use statistical methods to check the quality of products more efficiently than ever. Over time, it has become crucial for all businesses to base their activities on statistical information. With statistics, a business owner can make correct decisions about their financial resources, marketing of their products, and the location of the facility. Statistics provide actual data about a complicated situation to enable business owners to make factual decisions.

Forecasting

Managers and small business owners alike can analyze past data to find statistical trends for making future predictions. For example, sales managers can analyze their previous sales to estimate their future sales under specific market conditions. Your sales team will then use these forecasts to set up a production schedule. Imagine a basketball player who has to decide between playing in two positions. Of course, the goal of this player is to maximize his or her performance under both good and adverse conditions. Assuming that each situation is likely to occur, an analysis of Rudy Gobert stats will show the positions a basketball player can play over a range of performance patterns in a specific basketball court. Based on the probable weather patterns, the farmer can decide which product to plant.

Market Research

Companies are using statistics for new product development and market research. Marketers take random consumer surveys to gauge the potential for a proposed item or service and market acceptance. Of course, every manager wants to know the demand of a product or service before launching it. There should be enough demand to justify investing millions of dollars on developing a product and building a processing facility to produce these products. Managers can construct a break-even model from the statistical analysis to determine the sales volume necessary for a successful product or service launch.

Performance Measurement

Measuring performance is one of the common uses of statistics. For example, a marketer can gather data about a few product units and use the statistic to estimate the quality level of the entire production batch. It is referred to as statistical sampling, and marketers can use it for determining whether to reject or accept a bunch of production. Another use of statistics in business is for the analysis of a worker’s production output to know employees that aren’t meeting the productivity standards. Adjustments such as better communication, change in the work environment, and improvement in equipment may be necessary for workers who aren’t performing per the expectation.

Return on Investment and Risk Assessment

Risk minimization and optimizing of the return on investment is the objective of any capital expenditure project. Managers can use statistical methods to evaluate their project regardless of the strength of the competition, changing consumer preferences, and economic environments.

Customers Attraction

Numbers often attract people, and astute marketers can use their best statistics to bring more customers onboard. For example, a brand should consider providing vital statistics while advertising to try to entice potential customers to transact with them. Of course, customers would want to know how long a brand has been in the market and how customers review it before spending on it. Business statistics attract potential customers into trying out a new service or product.

As suggested by the adage “if something is measurable is manageable, business owners can present anything measurable in the form of statistics. Any business that doesn’t use statistics in the digital era is bound to fall back. Large organizations across the world use statistics for making informed decisions. For example, banks use statistics to determine whether to use financial ratios in their financial statements to offer loans or not.

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