Today, you can not imagine a business or an entrepreneur without information. Information is the basis for making quality decisions. However, it is not about any information. It is about quality. If they are essential to an entrepreneur, the business information sources will also be important.
When we talk about information, I completed a survey about business intelligence many years ago in 30 small and medium-sized enterprises. The results of this research were published in several international scientific journals. Business intelligence is a creator of knowledge for businesses and entrepreneurs. But, the basis of business intelligence is information.
On the other hand, I worked for three years in Customs Intelligence Department, where the information was more sensitive. However, there I learned many things because I was trying to simplify and automate collecting and processing the information.
One important thing you as an entrepreneur must remember is that information is one of the most valuable resources of your business.
Business Information Sources
If we want something to be classified as quality or important, we must assess its source. Many methods are used to assess the source of information. This assessment is a systematic process that will tell you whether or not to take the information as something serious after fulfillment.
Businesses can use two types of sources:
- Internal source. Your own databases or records, newsletters or reports in the business.
- External source. This is information from everywhere outside of your small business.
Especially interesting to me is the external source of information. In the study I mentioned at the beginning of this post, I find that internal sources are used somehow from businesses in reports or Excel spreadsheets and graphics. However, the problem is that the concept of systematic information collection from outside the business is not established. They still don’t know how to develop such a process, or the entrepreneur doesn’t know why they would use it.
If you’re a small business owner or entrepreneur, you need to choose suitable business information sources. You must be aware that the information you need to make decisions about your business will come from a variety of sources. There are many great online resources out there that can help you find this information. Start with Google. The Internet can be a rich data source, but it’s also dangerous to search for the facts. There are dozens of sites purporting to offer accurate, unbiased data about a company. So, it’s even more important to know how to differentiate between them and sites offering misinformation.
Examples of Business Information Sources
Let’s take one example. You are an entrepreneur that thinks about expanding the business in other regions in your country. To make quality and correct decisions, you need information about:
When it comes to customers, what are their habits, behavior, income, desires, problems, etc.? You need to know your target market and its size. Also, you need to know the growth potential of this market. All of this information is important for your decision to expand your business there.
The information source about the customers on other markets is something that you will need to look for outside your company. You don’t have an internal database for these customers.
What do your competitors offer on the market? How are they selling their products and services? What are their future plans? Yes, if you want to expand your business in this market, you need to collect information about your competitors in that market. This is also important information on which you will base your decision regarding expansion.
When you plan to expand your existing business, it is a good idea to find out more about your competitors. It helps you to have a better idea of what your competitors are doing. You can get a lot of helpful information from talking to other business owners on the market where you want to expand. You can also ask for information from your suppliers. These are people who sell you materials for your business, but also some of them will also work with your potential competitors on that market. It’s crucial to ensure that you don’t get too much information from these sources. So, they will be able to help you understand what your competitors are doing.
How much money should you invest? This question will need to give you a response about your costs. When you combine this with the information regarding customers and competitors, you can predict market share and quickly calculate the profitability rate for your expansion.
The most important thing to consider when expanding in a new market is the profit rate. The amount of profit you earn should be higher than what you spend on running the business. You should calculate the amount of money you will spend to increase your market share. This includes advertising, new products, distribution, and other costs. It is also important that you look at the competition you are up against. This will help you to predict how your profits will be affected.
You can also use this information in combination with other statistics to determine your own future. You will have to make calculations based on these numbers, and you will be able to predict the profit you will receive from the sale of your product. Also, you can compare the results of the same analysis for your competition to understand how they are doing. You can quickly determine their market share, price, and so on.
Return on investment.
How and when can you return that investment? So, now that you know the costs, possible market share, and profitability rate, you can easily calculate the return on investment. This will be the basis for your decision to invest or not invest in expanding your business in a specific market.
- Reading a book,
- Reading the newspapers and magazines,
- Or, reading the web page on the Internet and so on.
Older or Relevant Information – What is Better?
Finally, I come to what my purpose is in this post. Often we reject the adoption of certain information in our brain only because it is old.
For example, we refuse to read a book because it is older. We reject it, although we are aware that we have not collected all the knowledge (and we cannot) and that the book has quality information for expanding our knowledge. Do I have to reject the book by Peter Drucker, which is 15 or 20 years old, just because it is old? The answer is undoubtedly no. I can learn a lot about business from the one and only business guru worldwide from that book. In the new books, nearly all will reference some of his works. Should I discard the book by Abraham Maslow only because it is old, although he talks about the hierarchy of human needs that are also relevant today?
Both criteria are essential in different circumstances of the decision-making process.
Let’s continue with a book as an example. I have 50 books about math in my private library of nearly 400 books. The oldest book is from 1903. What I am surprised about is the same relevance as the newest books. In all of them is stated that 2 + 2 = 4.
Importance of Relevance in Assessment of Business Information Sources
If you use both criteria for information selection and apply the criteria about age first, immediately follow the question: Is it relevant?
Relevance should always have priority over oldness.
Here are more examples about the assessment of business information sources:
- As an entrepreneur, you should decide about a new product. You have a database with answers from questionnaires on such a product from the last 10 years. Probably, you will not reject the older data because, with them, you can see a trend or pattern of behavior of potential buyers of such a product.
- As an entrepreneur, you need to make a decision, whether to expand your business in Moscow or not. After that, you read that Hitler in the 1940’s attacked Russia and come almost to Moscow. Is this data old? Yes, it is old. Is it relevant? No, it’s not. In this case, ignore the information because it is not important for what is happening today for your business.
Once again, always check whether the business information sources are relevant or worth in modern terms before rejecting it because of oldness.