Do you know why most small businesses don’t make it big? The primary reason is that business owners never stop working on the business, while what they actually need to do is work on the business. This is the same message I discussed previously and you will read this later again in this book, but please etch these words into your memory! it’s essential to remember: you should be working on your business and not in it.

Any business owner worth their salt knows that there are some key numbers that make or break a business. Most small business owners that remain small will just look at these numbers like sales, revenue and profit. However, the ones who make it big, the really savvy ones do not look at these numbers, but they sincerely question them.

They question good numbers to understand how to repeat them and they question bad numbers to understand how to improve them.

Further, I hope you agree that scaling most businesses will need a team effort. It’s unrealistic to think that you can find all the team members who have such great gut instincts that they don’t need any data to drive their decisions and yet are consistent with success rates.

Therefore, as a business is expanding and you’re hiring more team members, it’s essential to establish a data-driven culture. Because only by examining the data, you can determine whether individual aspects of the business are successful or not. Additionally, without data analysis quantifying growth would be impossible.

Let’s take profitability for example. It is essentially an output of an equation, where your inputs would be numbers like sales, average order value & costs. Costs such as inventory costs, marketing costs, shipping costs, salaries of your team etc. etc. And hence to optimize your profits, you need to optimize each of these other numbers one by one. Further, each of these numbers which are driving your profit is a function of more numbers itself. For example, if we consider sales volume then that depends on numbers like: