Using Data to Make Business Decisions

Sunday July 12, 2015

You use numbers all the time to navigate your personal life. From calculating the trajectory of that incoming asteroid to setting the timer on your Doomsday Device (just to pick two obvious examples from the daily life of a typical RIFT adventurer), knowing your statistics is the key to success. The trick, of course, lies not in simply recording the figures but in making those figures work for you.

Your accounts are a living snapshot of your business' performance. If you're keeping those records just because HMRC wants to see them once a year, then you're wasting the best things they can do for you. The more clearly you understand every aspect of your business situation, the more able you are to steer it in the right direction.

Business explorations are all about planning, and the financial information you record is the launch pad for everything you'll ever achieve. Without getting too technical here, maintaining and examining your accounts can allow the alert adventurer to penetrate the fourth dimension and actually see the future! Predicting the shape of things to come is the first, most critical step in creating your own future, so break out your figures for last year (and before) whenever you're planning budgets or anticipating demand. Remember that deadly cash flow crisis that exploded out of nowhere and almost wiped out your Brainwave Nullifier's R&D budget? Remember how you had to liquidate half your Magna-Beam Cannon scientists to cover the shortfall? Well, all of that could've been avoided if you'd only read the signs.

Many people think anything to do with maths or numbers is scary or difficult - but you actually do a lot of very complex arithmetic and statistical analysis every day without batting an eyelid. Let us give you some idea of just how comfortable with numbers you actually are:

It's not often that you go through the supermarket checkout and the total on the til is a complete surprise, is it? You are keeping a constant running total, often involving sub-calculations - for special offers, for example - and doing algebra even though there's not an X or Y in sight.
If you’ve ever set an alarm to get to a meeting on time, factoring in how much time to allow for picking up coffee on the way, that’s pretty advanced maths too. In fact, every time you need to problem solve a situation that involves money, time, distance, the perimeter of a fence, volume of something, cost versus time you're instinctively doing maths, estimating, averaging, calculating deviations, all sorts of stuff!
Do you have a hobby like knitting, art or playing an instrument ? In all of these cases you use some very advanced maths around ratios, percentages, geometry and fractions.
If you play or watch a sport then not only will you have a great understanding of practical geometry but you'll understand statistics and probablities to a level much higher than most people - even those who work with numbers all day. Even if the most athletic thing you did today was throw a piece of paper into the bincan a couple feet away you did some maths. You instinctively calculated the required trajectory, the air resistance, the weight of the piece of rubbish, and the force needed to make it to the bin. Not only that, but you also figured out how strong a nerve impulse to send to each muscle at each moment in time to make that muscle contract (or relax) just the right amount at just the right time...impressive, eh?

As an interesting aside, even babies are able to calculate trajectories. If a baby as young as 16 weeks sees an object approaching them on a trajectory where it will land near them, they just track the object. But if it's going to hit them, they will preemptively turn their heads away. If the object is going to land right next to their head, they don’t bother dodging it. The accuracy is remarkable. Don't try it on a baby prior to 16 weeks though - they won't have developed visual acuity to pull this trick off.

And if you’ve ever seen a dog catch a morsel of food in midair, they’ve first had to do the same kinds of math - innate, advanced Calculus in a canine - so when we say we can teach an old dog new tricks, you better believe it.

If you can do all that, imagine what we can teach you to do with your accounts!

Most people still think of numbers in terms of "school maths lessons". It's a matter of realising what you already know how to do in other areas of your life and seeing how you can apply it in a different way.

As if seeing through time weren't enough, your publicly held records are a flag planted in the Business Battlefield, rallying allies and routing rivals with equal efficiency. You'd be wise to look into the financial records of anyone you're considering partnering with or battling against - because you can be sure they're doing the same thing to you...

Small businesses have a strong advantage in adapting to the unexpected and leaping on sudden opportunities. By their very nature, they're faster and more flexible than their larger counterparts. To seize that advantage, though, you need to have the alertness to recognise it and a clear eye for the fine details.

Get in touch now to hear more about how RIFT Accounting can turn your financial records into real, practical business tools - and watch this space for more Voices from the RIFT.