How to Make Better Decisions with Data

Even in a paradise like Hawaii, most small business owners spend their days trying to find customers, improve their operations, fend off competition, and make more money. Many trust their commercial education to the school of hard knocks. But some formal education on management and how it can use so-called big data in conjunction with geographic information systems (GIS) to provide a strong competitive advantage.

One example comes from a free tool that the Small Business Administration provides to small and medium businesses. Called Sizeup, it becomes a prospecting and benchmarking whiz. No matter how nice the weather and beautiful the scenery, automobile drivers will eventually need the services of a mechanic. But where do you open your business? The site BigIslandNow.com performed an analysis for some parts of Kona, a district on the Big Island of Hawaii:

For example, say you are considering opening an automotive repair shop in [seaside town] Kailua-Kona. A search on SizeUp of the automobile repairing & service industry in Kailua-Kona showed 135 search results. Under the advertising tool, SizeUp showed that the population of Kaliua-Kona is 30,387 people, with total annual revenue of $7,705,000 while nearby Kealakekua has a population of 3,541 with a total annual revenue of $1,955,000. The location map showed that the majority of automotive repair businesses are centered in Kailua-Kona with fewer shops south Kealakekua or north near Honokohau.

That bit of data analysis suggests that some areas may be underserved in easy access to auto repair, but could lack the population and income density to support a business. Of course, small businesses owners have used data in the past to help make decisions, and using a ready-made tool from the SBA seems like it should be intuitive and natural. However, the possibilities of using data, especially GIS, are immense.

For example, entrepreneurs and executives at small and medium businesses can identify opportunities they had never dreamed up, identify patterns, trends and holes in the market, and otherwise use GIS to creatively solve problems with geospatial thinking and technologies. Another example is a small utility company that has GIS with smart meters to receive thousands of data points per customer rather than one a month from a manual reading. The information shows patterns of electrical usage and allows the utility to more accurately forecast future use, patterns of expansion among customers, create new demand-based pricing models, and better contract for supplies of fuel and power to minimize costs.

Even as new tools and data sources make GIS business analysis available to even the smallest companies, there is a danger. Small businesses may not be able to afford additional staff with GIS expertise. Even if they can, there is a difference between the technical expertise commonly available and the more sophisticated strategic understanding of how to implement and use GIS, integrating it with a broader vision of what the company needs. Business owners and managers might consider gaining the knowledge and training necessary for a sophisticated use of GIS. One source of the necessary learning is a program like the contemporary MBA degree online offered by American Sentinel, in which people study at home and have access to a broad range of courses in how managers can better use GIS.

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