“Big Data” Benefits Small Businesses Too

(This post appeared on our successor blog, The Analysights Data Mine, on Monday, May 5, 2014).

One misconception about “big data” is that it is only for large enterprises. On its face, such a claim would sound logical; but, in reality, “big data” is just as vital to a small business as it is a major corporation. While the amount of data a small business generates is nowhere near as large as that which a large corporation might generate, a small business can still analyze that data to find insightful ways to run more efficiently.

Imagine a family restaurant in your local town. Such a restaurant may not have a loyalty card like a chain restaurant; it may not have any process by which to target customers; in fact, the restaurant may not even be computerized. But the restaurant still generates a LOT of useful data.

What is the richest source of the restaurant’s data? It’s the check on which the server records the table’s orders. If a restaurant saves these checks, the owner can tally the entrees, appetizers, and side orders that were made during a given period of time. This can help the restaurateur learn a lot of useful information, such as:

  • What entrée or entrees are most commonly sold?
  • What side dishes are most commonly ordered with a particular entrée?
  • What is the most popular entrée sold on a Friday or Saturday night?
  • How many refills does a typical table order?
  • What is the average number of patrons per table?
  • What are the busiest and slowest nights/times of the week?
  • How many tables and/or patrons come in on a particular night of the week?

Information like this can help the restaurateur estimate how many of each entrée it must prepare for on a given day; order sufficient ingredients for such entrees and menu items; forecast business volume for various nights of the week, and staff adequately.

In addition, such information can aid menu planning and upgrades. For example, the restaurant owner can use the above information to look for commonalities among the most popular items. Perhaps the most popular entrees sold each involve some prominent ingredient. In this case, the restaurant can direct its chef to test new entrees and menu items that feature that ingredient. Moreover, if particular entrees are not selling very well, maybe the restaurant owner can try to feature or promote them in some way, or discontinue the item altogether.

Also, in the age of social media, sites like Yelp and TripAdvisor can provide the restaurateur with free market research. If customers are complaining about long waits for service, the restaurateur may use that to increase staffing, provide extra training to the waitstaff. If reviewers are raving about specific menu items, the restaurateur can promote those items or create new entrees that are similar.

“Big Data” is a subjective and relative term. Data collected by a small family restaurant is usually not large enough to warrant the use of business intelligence tools such as SAS or SPSS to analyze it, but is still large enough to provide valuable insights for a small business to operate successfully.

 

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