by Dalip Jaggi

Are you ready to launch your startup? While this is an exciting time, your business requires more than enthusiasm and good ideas. The majority of startups fail if they don’t gain traction in the first year, so your long-term success depends on strategic moves – including effective decision-making.

Making the right decisions is easier said than done, however. Your business is new, and you may not have  the historical knowledge to pull from. Fortunately, you can gain a competitive edge using the information available with data analytics.

Know Your Audience and Market

Your target audience and market are key to your business success. Your idea may be brilliant, but you won’t get anywhere if you’re not zeroing in on the right customers and understanding what they want.

Data bridges the gap between what you think your customers want and what they actually want. Before you launch your new product or service, you have to be sure it’s aligned with what your prospective customers are looking for.

Data analytics can be a huge help in tracking customer information, trends, and desires. With this knowledge, you can better understand your target customers and shape your product development and marketing messaging to speak directly to them.

A great example is location in real estate. With residential real estate, homes in areas with great accessibility, appearance, and amenities, as well as future development plans, often have a higher value. The same is true of commercial real estate. For example, if you were to launch an artisan brand, it’s crucial to be in a market with an established demand for handcrafted goods, farm-to-table food, or natural and organic products.

Discover Market Gaps

Your early years will involve some trial and error. One of the challenges for startups is making decisions to adjust marketing strategies or switching up your business, but doing so on a whim can be a recipe for disaster.

Data analytics can inform these decisions by revealing gaps in the market – gaps that you can service. These may be overlooked or underserved, whether it’s a specific demographic, emerging trend, or other detail that your competitors aren’t providing.

If you can identify these opportunities early enough in the process, you have a chance to pivot and capitalize on the market gaps long before your competitors catch on.

Take Calculated Business Risks

The early years of a startup often involve a lot of risk and sweat equity. You’re spending, investing, and incurring risks, but you may not reap the rewards for months or years. You want some assurance that you’re headed in the right direction.

Your risks may be new competitors, shifting consumer preferences, rising materials costs, and more. Some of these may be obvious to you, while others may creep up along the way. Data analytics can reveal these risks earlier, giving you valuable market insights and a warning about potential pressures that may impact your operations.

These details also help you analyze your spending, talent shortages, and other risks that you will need to navigate in the future. For example, real estate builds and home renovations are notorious for having a lot of complexities that can impact projects, including material and labor shortages, delays, safety issues, and fluctuating materials costs.

Data can be helpful for forecasting to ensure your projects go as smoothly as possible. For example, you have early warning to adjust your renovation project schedules to account for weather delays or shipping issues, diversify your pool of subcontractors, or source materials elsewhere. Without forecasting, you’re at the mercy of these external factors.

Improve Products and Services

Ideally, your product or service will have its own distinct features and advantages that give you a unique edge in your market. It’s important to not only understand what these are, but how you can position them in real-world context to show the value to your customers.

Using an example in real estate, what sets certain properties apart? Why do buyers rely on certain real estate companies or builders? Often, business owners have a completely different idea of what appeals to customers or what features or advantages they’re looking for.

Reviewing customer feedback and data offers insights into why customers choose certain products or services, which can then guide your marketing efforts.

Of course, pricing is a big part of purchasing decisions, but customers with brand loyalty are less price-sensitive overall. Communicating the value of your product or service and the aspects of your brand that set you apart helps you position your company without undercutting the competition (or your profit margin).

Create Accurate Sales Forecasts

No one has a crystal ball to see the future and make hindsight decisions, but understanding your growth curve can help with your budget planning. Accurate projections give you an opportunity to get ahead of market shifts and pressures to navigate change more effectively.

Unfortunately, many businesses rely on outdated methods for forecasting, including assumptions. Startups in particular often fall victim to the founder’s “gut instinct” and enthusiasm, leading to inaccurate – and often expensive – forecasting errors. If it happens enough early on, it can dig a hole that your startup can’t recover from.

Data can validate assumptions or inform new directions. However, predictions are only as good as the data’s integrity. When you gather information from customer feedback, sales histories, social media engagement, or industry trends, you can get a big-picture view of your business’s positioning and forecasting.

Boost Operational Efficiency

Data analytics offers a glimpse into inefficiencies in your operations that can harm your business in the long term. When you get into the nitty-gritty of your operational data, you can identify delays, time-wasting tasks, and other inefficiencies that hinder your productivity and growth.

Armed with this information, you can make changes like automating processes, optimizing workflows, and allocating resources efficiently. Just like market assumptions, making guesses about how your business operates is only setting you up to fail.

For example, if you have a manufacturing business, you can analyze your supply chain metrics and identify holes in the production process. With this knowledge, you can revamp your processes for more streamlined production and less waste.

Keep in mind that operational efficiency isn’t just how quickly and profitably your business runs. It keeps quality at the forefront. For example, you can track quality indicators and pick up on potential problems before they can harm your brand – ensuring you have the high standards and consistency customers expect.

Access Capital

As mentioned, running a startup in the early stages often involves a lot of money out and less coming in. You may need to secure financing for your business, but getting an investor or lender to take on the risk requires a lot of details and tangible information about your business.

You can inspire faith in investors, but you have to have the hard data to back it up. Analytics offer in-depth details to chart and showcase your growth journey based on key indicators like revenue spikes, market share and penetration, and customer growth. These insights can give your lenders confidence that their investment will pay off.

In addition, embracing technology solutions like data analytics sends a signal to investors that you’re committed to strategic, informed decision-making. You’re not just following a passion project or relying on your gut with your own financial risk – and theirs.

Harness the Power of Data Analytics for Startup Growth

Few experiences are as exciting as launching a startup. You have a lot of landmines to navigate along the way, however. The best way to set yourself up for success is by leveraging the tools available to you, including data analytics. With a clear view of where your business is currently, where you want to be, and what obstacles may lie in your path, you can make smart decisions to fuel your future growth.

Bio:

Entrepreneur, technologist, and passionate business leader sum up the core of Dalip Jaggi, co-founder of Revive Real Estate, a PropTech company with a goal to democratize house flipping. Since its 2020-inception, Revive has since become the smartest solution for homeowners to maximize their home’s sales value across the nation.

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