As a small business owner, it’s possible that Excel is sufficient for your data storage and management needs. It may be enough to help you track customer contact information, search for data and even manage basic accounting. However, how do you know when it’s time to take a step further and determine whether or not you should invest in a database?
Start by asking yourself the following questions:
Will a database save time?
- Spreadsheets can become unwieldy, costing a small business owner unnecessary time and money to track down a simple fact. A database and related software programs will allow you to access even the most obscure piece of information with a few clicks of the mouse.
- More than one department may need to access and update your company’s data on a regular basis. A database will allow company-wide collaboration in real time with no risk of confusion over disparate document versions.
Will a database improve my marketing efforts?
- Many companies store customer information in more than one location, e.g. on an order form and in a spreadsheet. A database will ensure consistency of marketing data across multiple documents.
- If you have a web-based business, you may be missing out on the opportunity to capture and use large amounts of customer data. A database allows you to parse your data to facilitate one-to-one marketing tactics to existing and potential customers.
- In an age that’s becoming increasingly visual, you may find that your business communications have evolved to require the use of images in addition to text. A database will allow you to keep track of thousands of images so that you can add a visual element to your marketing both on and offline.
Is not having a database putting my business at risk?
- Sensitive information should not be kept on laptops and PCs that can be stolen, hacked or accessed by unauthorized users. If it is designed correctly and incorporates encryption technology a database can keep your data more secure.
- Once your company has grown to a certain size, you may begin seeing an unacceptable number of errors in your data. For example, inaccurate sales totals, implausible inventory levels, inaccessible email addresses and nonexistent codes. A database will self-correct by only allowing information to be entered if it’s in the correct format.
If you have ultimately decided to invest in a database, what kind is best?
If you’ve answered yes to at least one of the questions above, you may be ready to consider a database. However, you may still feel overwhelmed by the breadth of choices. Start by recognizing that database software typically falls into three general categories:
- Desktop systems are the least expensive and simple design that is used to run on a desktop or PCs. These are designed for single users.
- Web-enabled or “cloud-based” software is inexpensive, flexible and intuitive to use, but does raise some concerns about data security for the most confidential information.
- Server-based databases store the most data and can be accessed by multiple users. These carry higher costs because they usually require a database administrator, either on staff or on a consulting basis.
Once you’ve chosen a general approach – with or without the help of an IT consultant or computer programmer – there are many more questions you’ll need to ask before you can choose a packaged application or customize one for your immediate and future needs. In the meantime, if you’ve been able to determine that you’d be better off with a database than without one, you’ve taken the right first step.