What could horse racing possibly have in common with your business? In both horse racing and business, people have long been trying to predict the future and then wagering on/investing in their predictions. They also have tried to hone their guesses by using information to make better decisions.
Here are five steps people have used to help predict the future—whether it's horse racing or a business.
It Starts With Big Data
In horse racing, big data is collected in a newspaper called The Daily Racing Form, which includes almost everything you could ever want to know about each horse race at a specific racetrack in a given day. The paper includes past performances, jockeys who’ve ridden the horse, weight, breeding, track conditions, etc. The paper also includes handicappers giving their opinion as to how the races will be run and who should finish first, second and third.
In your business, can you create your own version of The Daily Racing Form? What information would you include in it? I would suggest past sales, previous and current customers as well as prospects, products and services you’ve sold in the past, employee history (headcount, turnover, etc.), marketing campaigns and their results as well as any significant happenings in your business.
You may then want to collect public information records and reports on your market, your geographical location as well as anything else that can play a role in helping you figure out the best course of action for your company moving forward.
Create Your Own Weighted Algorithm
In horse racing, you can have a 10-horse race with 10 experts each picking a different horse in the race. The reason for this type of result is that each expert has a weighted algorithm for picking horses. Some may see breeding and the jockey as more important than track conditions or the length of the race. Others might pay attention to the trainer and weight each horse is carrying in the race. Not every expert’s approach to each race will be the same.
In your company, what data points deserve to be weighted more heavily? Is it sales? Marketing? Having a patent or trademark? Maybe it’s a combination of several factors. You may also want to check out your competition in the race. What are their strengths, and how will you overcome them? More importantly, who's considered to be the favorite to win? What makes them the favorite? You may be able to use this information before the race starts.
Produce Actionable Insights
After collecting the data and analyzing it, you may then have one or more possible options for your company. Actionable insights may include how to price your product or service, which types of customers to target, how to deliver your marketing message (e.g., social media, direct mail, local advertising, etc.). These insights can also help give you a realistic idea of how much product you should sell in a given period. In a nutshell, the insights may tell you how the race will be run—and how you can win it.
Make Your Investment
In business, your bet is likely on the products or services you believe your customers and prospects will want from your company. The favorites may be the bestsellers from past years, while the long shots might be new products or services you offer this year. Consider having a balance between favorites or long shots; you likely won't want to place your entire investment on an unproven product or service that may not deliver the results you expect.
Review the Results for Future Events
Another important step may be to review the results after each month, quarter and year. How did you do? What products and/or services were big winners, and where did you lose? Try to make your review thorough; you don’t want to give up on a product or service that may have had a bad month or quarter because the targeted customers didn’t have a chance to buy or review it.
In business, as in horse racing, there may not be guarantees. But if you take time to review your opportunities, the market and the competition, weighing criteria appropriately before making your investment, you may have a much greater chance to find yourself in the winner’s circle at the end of 2016.
For more tips on expanding your business, access Business Growth: How to Survive and Thrive, from MSNBC’s Your Business.
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