startup

The effect and use of data-driven decisions in a startup

Having your own company is a dream that is being followed by every young individual these days. But to have a startup company is not an easy thing to do. The reasons for the same is that there are a number of complications that are needed to be taken care of. One of such is making data driven decisions as a startup company.

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As an owner, it becomes very important to make decisions. Also, every individual has his or her distinct suggestions and inputs. Opinions play a vital role in businesses and with each growing day your employees become more mature and start giving their opinions. Sometimes these opinions are accepted and sometimes not hardest decisions data driven?

So the question that arises is, how do you make take data-driven decisions?

Decision making can broadly be divided into 3 categories-

  • Strategic – that impacts on the future aspects and is very complex
  • Tactical – Used to achieve strategy and is a bit less complex
  • Operational – Daily routine decisions that are being taken

On an average, the number of operational decisions is much higher than the number of tactical and strategic choices. But the impact that tactical and strategic decisions make is way too higher than operational. That is why it becomes very important to make strategy-related decisions wisely and precisely.

In most cases, in our day to day life, we take the majority of our decisions based on our intuition. Sometimes it works and sometimes it doesn’t. That is why in order to get complete assurance in our decisions, a data-driven decision strategy has to be used rather than intuition which has very high rate of failure.

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What is data-driven decision making –

As the name suggests data-driven decisions are the decisions that are being taken based on a result being derived from certain data.

This is a new strategy that is being implemented these days because our intuitions don’t work always and so it can cause a great loss as well in your businesses.

In data driven decisions a great amount of data is being collected over the years and this data is used in analyzing a trend.

This trend gives a pattern which eventually helps in making fairly accurate decisions that can stand the test of time and can be presented to future partners and investors.

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There are three questions that need to be asked in any business

  • Ask the right questions
  • Collect and analyze the data
  • Make an informed decision

Asking the right questions is one of the most important steps in making a data-driven decision. By doing this it helps you to get a structure like a frame for the entire process.

 

Identify the right amount of choices that people are looking for. Try to get their opinion and once you are aware of that you can easily collect and analyze the data.

Now once you have the analyses done the final step which needs to be implemented is to make the right decisions and policy based on the results of your analyses.

Conclusion

If you have a business in mind or you have already started, then do yourself some good and learn to use data driven decisions so that your business will be more sustainable and easier to attract partners.

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Read: Top 20 Lucrative Less Capital Intensive Profitable Businesses In Nigeria

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