You might not have time to pore over sales data, but what you can get from it can help you evolve and optimise your operations.

While cash flow and profit are the number one priorities of new small businesses, tracking sales is an important part of earning money. Without your sales, you can’t see a trend, take away a product, or increase stock to fill demand.

The world of omnichannel sales, where the customer enters the equation through multiple points of sale, is never more relevant than it is now. In this post, we’ll go over different ways you can monitor and analyse your sales data to start growing like a boss right off the bat.

What are sales analytics?

Small businesses generate a tonne of data, and the data of the business can inform choices. With every purchase that a customer makes with you, you have access to a goldmine of data that you can use to make all sorts of business decisions.

“Digital and omnichannel shopping is so important,” said Opher Kahane, former vice president and general manager at QuickBooks Commerce. ‘The business owners have to work out what products are selling most. This is a must-have sales analytics, especially as you begin to scale.”

Here’s an overview of the use of sales analyses and what their findings can tell companies to expand.

You can make cash flow better.

Cash is a company’s lifeblood, and the only way to bring cash is to sell it. Looking at sales, you know where you are cashflow-wise now and where you will be in the future.

‘If you don’t bother to go look at sales data, you’re putting a lot of information out there that would really come in and make a difference for your business,’ says Twyla Verhelst, CPA, lead of the Accounting Professionals Program at FreshBooks.

It drives sales and marketing actions.

Small firms sell their products online in various avenues, like their own sites, and also on general marketplaces such as Amazon. You can’t identify where you need to go without keeping track of those sales, as much as you do of your in-store ones.

Say that you have been advertising on Facebook, but now your largest sales are on Amazon. Maybe you’re even planning to buy more of a particular product even though there is less demand for it.
“Once you have [your sales data], you know which sales channels you want to go all-in, what marketing you want to go all-in on, and which products you want to go all-in,” Kahane said.
It can help you focus.

For new small business owners, time is short; not many hours are left in the day to seek new customers, much less study sales reports. When a business looks at sales, they can get more specific, said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. He gave the example of one firm, which had been selling direct to end users and wholesalers. When the company analysed sales trends, it decided that it would be better served by selling to distributors only.

Analysing your sales can help you know which products are most successful and which ones aren’t, which customers are most successful, and what you can do to streamline your sales.
It’s a big data set, and there’s technology to help,” Sullivan said.

It can help you focus.

For new small business owners, time is short; not many hours are left in the day to seek new customers, much less study sales reports. When a business looks at sales, they can get more specific, said Tom Sullivan, vice president of small business policy at the U.S.

Chamber of Commerce. He gave the example of one firm, which had been selling direct to end users and wholesalers. When the company analysed sales trends, it decided that it would be better served by selling to distributors only.

Analysing your sales can help you know which products are most successful and which ones aren’t, which customers are most successful, and what you can do to streamline your sales.
It’s a big data set, and there’s technology to help,” Sullivan said.

It can add value to your business.

The understanding you get from sales data is the thing that’s going to transform your business and help you do what it takes to make it better.

So, what sales data should you track?

There are tonnes of sales metrics that you can track for your business.

• Growth in sales: This statistic tells you how your business is performing when compared to a quarter, a month, six months, or a year ago. It will tell you whether sales are higher, lower, or unchanged from the last time.
• Product performance: By looking at product performance using sales data, you will get to know which products sell and which don’t. You’ll get to know the popular colour, type, or season for products. This number will tell you if you should order more, reduce inventory, or focus on one product or another.
• Sell-through rate: This set comes handy for inventory control. It shows you how much you’ve sold in a month and how much you have in stock. You can use that information to drive sales.
• Lead conversion: Customer acquisition costs can swallow your profits; a lead that turns into a customer takes time. With your sales reports, you can see your conversion rates. And if it’s taking too long, you know you have to adjust your C/A process.
• Channel sales: The e-commerce market has boomed during the pandemic, so businesses are having to sell through various channels. Track where the sales are coming from, and you’ll be able to see what channels to invest in.

These are some of the sales metrics you can monitor. What works for you is dependent on the product that you sell, the seasonality of your business, and the number of years you’ve been in business.

What’s measured is better, and that, of course, includes sales,” said Salesforce senior vice president of SMB Enrique Ortegon. “These might be things like what rep is a good sell, what are the most popular days/hours, and what are you selling most of or less of, and what promotions are the most effective.”

What is a sales data analysis?

Knowing that you must have sales data is one thing, but collecting it and doing it is another. That is an overwhelming and paralysing job for entrepreneurs with a small business.

“Pre-2020, more companies got away with success on accident,” Verhelst said. “They took instinctive decisions, which paid off for them. They won’t be very good for it someday. ‘If only they had had more experience,’ they would have done better.

Start with what you have.

When you feel the fear, says Verhelst, start with the simple business systems. It might be a POS system, invoicing platform, or another operating system. What you can gather from those sources is usually enough to guide you. If not, Verhelst suggests looking through your tools to see if there are programs that might be able to give you more context.

Analyse sales based on cycles.

In sales analysis, some companies look at the year over year or month over month basis. But if your business is seasonal like, you sell most of your goods around the holidays Kahane says that you should keep annual sales records. Month-to-month or quarter-to-quarter comparison is likely better if you have no distinct busy season. Other companies also analyse sales by the time period of an ad campaign or social media push.

Speak with your network

“Look at your sales data with an empathetic eye,” Sullivan says. Whether the numbers are terrible or not, it is good to have that visibility on where your sales are at and where they’re going.

Don’t forget to look to your personal network the “small business owner’s board of directors,” according to Sullivan for help on what to make of your sales and what you can do better. They’re the people you consult with friends, family, and business peer groups.

“We small entrepreneurs have all kinds of ideas for each other all the time,” Sullivan said. ‘All of the big companies that are doing well have a board of directors.

What are some of the sales analytics tools you need?

A lot of sales analytics solutions are out there at a range of costs. Here are a few sales analytics software for small businesses that is extremely popular:

• SAS: SAS, one of the data analytics leaders, has been empowering businesses with data since the 1970s. Its sales analytics feature makes it simple for you to analyse sales and forecast.
• Salesforce Essentials: Small business CRM where you can organise your contacts and leads, gather sales statistics, and forecast. It is easy to implement, and it can scale as you develop.
• FreshBooks: FreshBooks is an accounting system used by small businesses for managing their accounting functions, and it is compatible with a wide range of popular CRMs like HubSpot.
• HubSpot Sales: HubSpot Sales unifies all the information about a small business into a single system where you can use it to calculate sales, build email templates, and track the performance of your business. You receive the free tools and can add as your business expands.

Sales analysis can take a company to the next level.

The free-will kind don’t come easily without context. Analysis of sales can tell you exactly where the best ROI is coming from. This means that you can spend on what works and eliminate what doesn’t. To understand sales data also means knowing who you’re selling to and why. This can then guide your future marketing and advertising strategies to help get more people reading what you’re sharing and increase sales by reaching the best-fit audience possible. Don’t sleep on sales reports—they can transform your business.