Business Intelligence, Data Nerds, Learning New Things

The Business Intelligence of Money

This post is triggered by the January financial woes. Everybody, or most us at least,  Financial freedom - Money analysisagree that right about this week, January feels like the longest month of the year.

Apart from time, money is one of the most analyzed values. Some companies do not analyze anything else, besides money-in, money-out analysis. A pity because then you can miss the behavioral values that affect money-in money-out ratios.

However, where companies can over-analyze money, individuals have a hard time understanding the intelligence and value of money.

Business Intelligence is the art of finding useful, actionable information in the existing data-volumes and then, utilizing this information to make decisions that can alter lives.

Even private lives in the micro level of finance.

There are lots of tips on how to stay afloat even through emergencies. For example, save 10% of your income every month. But does that really work for all of us, all the time? Doubtful.

Alternatively, the intelligence of money is being economical as a way of life.

To save is to learn to understand Business Intelligence of profits and losses:

  1. High Season, High Price. Low Season, Low Price.
    • Travel cheap – Buying tickets on certain days and certain times can save you up to 70% on flight tickets. Airlines earn the profits on the loaded dudes who buy tickets at full price on the wrong days. To fill the remaining seats, they then cut prices for the poor dude who must travel and are looking for a deal.

Be the dude and look for tickets at uncomfortable hours.

    • Buying certain items on certain days and certain times can save you quite a dime per year. Same theory as above. The profits are earned in the beginning of the sales season of whatever it is. Even fruits. Most people buy avocado at full price when avocados first arrive in the market. After a few weeks, most consumers have had a fill of avocados and the shops can’t seem to get rid of the avocados. Voila! Cheap avocados.

Shopping 60th January 20182. Companies use Discounts as a way to get rid of what can’t be sold on full price. It is not a favor to you. Learn your math for utilizing those coupons!If have combination promo codes and coupons, use the promo code that you can apply on the whole order, and full price first.

  • No Company is your best friend unless you have a friendly-price-contract. And even then. Learn to Compare. The biggest BI activity is comparison. Sales Now compared to last year/week/month etc. Compare your potential buys before you order.
  • You are your own core business. You generate the income and the profits. And unfortunately, you are also the expense. Understand your income inflow and outflow.
    • What costs you money? Is it something you must have for your core business to be productive? Can you automate it? Can you control the outflow?
      • Companies usually try to reduce employees and other volatile assets that need lots of maintenance. Can you?
    • What earns you money? Is it sustainable? Can it be optimized?

Put away as much as you can in cash every month. Once we learn the hack of saving, we can learn to invest the savings. This is recommended by most Financial advisors.

Don’t start to buy funds and shares until you are debt free and have a buffer saving.

Simply:

  1. Cancel your credit cards
  2. Pay your debts.
  3. Save!
  4. Invest

After you have stashed away the ~10%, if you can, you can continue to save on the net income left. It is thrifty, and can be categorized as penny-pinching but the rewards are worth any name calling.

 

 

 

Advertisements
BI for Start Ups, Business Intelligence, Data Nerds

Business Intelligence as a Way of Life

In my opinion, the essence of Business Intelligence (BI) is not the what but the why. You have heard that before, so it will annoy you to hear such a cliché, especially concerning as serious a matter as BI.

Bear with me, please.

Of course, BI is different for different businesses depending on the level of maturity, the market share and the revenue. Mature, well established businesses probably need BI for the complex purpose of keeping the customers they already have and where plausible, for attracting new customers. It is called Improved Sales.

New businesses need BI for the sole purpose of establishing a presence in a new, probably unknown, and probably occupied market. What we now call BI has existed in many formats from as long as time is ancient. Market Research for instance:

  • What do you want to sell? What needs selling?
  • Is there a Buyer? Is there a need? Why do you think there is a need?
  • Does what you want to sell already exist? If yes, how much of it exists? Why do you want to sell it anyway? If no, why isn’t any other clever bugger selling it?
  • Location? Have you found a perfect location? Why is it perfect?
  • How about the competition? What do you plan to do differently? Why do you want to do anything different?

You see the whys? It is a step by step progression from what to why of course, but the most actionable knowledge comes when you have the answer to the question Why.

Here is a breakdown of my theory: Say you ask for a report of the potential customers in the vicinity of your new business venture. Say that after a lot of research and consideration, you decide that your new business venture should be Selling Beautiful Handmade Wallets. You will be designing the best wallets at home and and retailing them in a small Online store in a back alley behind the online garage in the city called Online Nowhere.

  1. Number of potential customers = 1,4 customers
  2. Promising Buyers = Married Women
  3. Expected Revenue = 10,2
  4. Currency = SEK

You even get an example customer:

  1. Customer Number = SE4321 (Swedish Customer)
  2. Customer Name = Lim Pan
  3. Customer Payment method = Credit Card
  4. Customer Address = 43 Trinity Stockholm
  5. Customer Gender = Female
  6. Customer Age = 37.5
  7. Customer First Order = 12th June 2014
  8. Customer Most Recent Order = 12th June 2017
  9. Customer Average Order Amount = 557
  10. Customer Currency = SEK
  11. Customer Marital Status = Married
  12. Customer Family = Two Children

Imagine you get the above simplified report including the detailed information on a specific customer, what catches your attention? Is it the average amount, the date of birth, the gender or the payment method? The more urgent question is, Why do you want to know anything at all about a specific customer? Is it for marketing, is it for Service improvement or is it for analysis of customer behavior?

What is Service improvement for you?

I would like to suggest that the best way to utilize BI in this case is to find out:

  1. Why you entrust your life to a wallet?
  2. Why would anyone want your beautiful wallets?

Don’t get insulted, they are beautiful wallets! But, there are multitudes of ugly wallets that do the job! So, is it that your beautiful wallets function better than the ugly ones? Is it possible that your beautiful wallets are cheaper or pricier than the ugly ones? Why is that good? Is it good for you or for the intended customer?

SMART
From http://www.houseofhunt.com

Data says that the potential customer pays with a credit card. Why Credit Card?

Could the potential customer be persuaded to pay by other means?

Why is the potential wallet buyer a woman? Do women use wallets?

Data says, there are 1,4 potential customers in Nowhere. Why 1,4?

How many people live in Nowhere? Why don’t the space occupants need wallets?

Why the best wallets in the world? Why not cats and dogs? Why not hair pins?

Why retail? Why a small Online store in a back alley behind the online garage in the city called Online Nowhere? Why not a big wholesale beside Best Priced Wallets Online?

If you cannot gather enough data or enough gossip to answer most of these questions, and more, you can kindly be accused of gambling.

With BI, you do not always have to have a huge complex databases, the latest BI tool, or a team of BI experts running around their tails recreating age old KPIs to send out age old reports.

BI is a way of life.

It is the self preserving choice to not jump on any train without asking where it is going.

The cool-headed decision to not spend a dime without checking how many dimes you have left.

The safety precaution of not walking a dark alley alone.

The SMART goal that needs a background, a baseline, an investment, a commitment and a future.