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Entrepreneurship Resources

Importance of Data & Statistics in Business

Outline of a gear inside of a shining light bulbData and statistics play a vital role in all businesses and entrepreneurship ventures by providing insight into complex and uncertain situations. Data can be divided into two broad categories, internal (primary) and external (secondary). Internal data is generated from within the business, for example, sales reports, inventory analysis, and expenditures. intuitively, external data is collected and processed outside the company. This page will focus primarily on external data. External data is vital to understanding your customers, competition, and industry. External data and statistics can be used to:

  • Make predictions about the future – effective forecasting allows business to develop data-driven strategies that will ultimately help them anticipate changes within the market
  • Manage risk – data can provide key insight into local, regional, and global economic environments that can prevent companies from making untimely capital investments.
  • Assess Markets – It is vital to gauge consumers' needs and capacity for a product or service (verify market need). This data helps businesses assess if there is enough demand, identify the customers, identify the competitors, and test the market viability.

In a perfect world, data and statistics should help you make decisions quicker, solve problems faster. However, there are limitations to find, use, and analyze data and statistics. Some data sets may have a small sample size or outdated data, both can negatively impact the accuracy and integrity of resulting projections or decisions.

The first 2-minutes and 30-seconds of the following video will demonstrate why data is an integral part of successful businesses:

Data and Statistics Databases

The following databases are a good place to start your quest to finding data and statistics for your research: