A multitude of software platforms support a modern business’s daily operations, and each one collects and tracks data on nearly every aspect of operations. Harnessing and using these datasets, a process called business intelligence, can help you gain a competitive advantage while better understanding your day-to-day operations. But with so many touchpoints, data sources, and platforms in use at any given time in your cannabis business, it can be difficult to leverage at all — especially if these data sources aren’t designed to “talk” to one another.
How can you use the data your business is already generating to make good decisions? This guide to data analytics for cannabis businesses can help you improve the way you gather and use data to grow your business with purpose.
What data is collected, and how can cannabis businesses use it?
Cannabis businesses use many disparate systems, including point-of-sale (POS) systems, seed-to-sale tracking systems, inventory management software, accounting software, and so on. Each system gathers detailed information that you can use to track and measure revenue and growth, determine the quality of your revenue, and see customer loyalty.
Examples of the available bodies of data include:
Whether you’re a retail dispensary or a cultivator, you need to understand how your products are selling or what your accounts receivable looks like. Point of sale systems and inventory management systems detail which products sell and your profit margins on each sale.
By regularly pulling and analyzing sales data, you’ll have a clearer picture of what’s actually making your business money. Determining which products are in high demand, where they sell best, and which products should be discontinued are just a few of the data-driven decisions you can make when sales data is properly harnessed.
Record data about the products or raw materials your cannabis business purchases. This information typically exists in inventory management software and seed-to-sale tracking systems.
Tracking this information can help you conduct cost-benefit analysis, negotiate better pricing with suppliers, and identify opportunities to increase profit margin on any number of products or services.
You need to know your customers, from the twice-yearly buyer to the weekly visitors. Understanding customer demographics, the types of products they like to buy, how much they spend, and how often they return can improve your ability to plan inventory, budget for marketing programs, and determine which audiences are most worthwhile to target. You’ll find this information in POS systems and customer relationship management (CRM) software.
Your employees are one of your most important assets and one of your biggest expenses. Access to payroll data can help you monitor cash flow and budget accordingly. This data is usually available in payroll systems or accounting software.
Moving from data collection to business intelligence
There’s a difference between simply collecting data and conducting business intelligence. Establishing integrations throughout your software ecosystem is key to making all this data available in a way that enables better decision making.
Integrating your business software means the sales that you ring up in your POS system will be automatically deducted from your inventory management tool and the revenue will be immediately recorded in your accounting software. That saves you time and reduces the change for data entry errors, giving you an accurate picture of your business operations.
The key performance indicators (KPIs) you monitor will depend on your goals, and your business software gives you the means to monitor them. For example, if you want to optimize staffing levels, your KPIs may include metrics like average revenue per employee, average sales volume per employee per shift, and overall sales volume by day and/or time. Understanding these KPIs can shed light on whether you’re overstaffed or understaffed at certain times, as well as support individual employee performance management.
While your KPIs will be different if your goal is to get acquired or if you want to optimize inventory levels, an integrated and unified business data model will ensure you can access the information you need. With these data-driven insights at your disposal, you’ll be much more capable of making informed decisions that set your business up for success.
What are data silos, and how do they impede business intelligence?
Data silos, also called information silos, refer to data that’s isolated from the rest of an organization for some reason or another. In the case of software used by many cannabis businesses, it’s because these systems don’t “talk” to one another, or are managed by teams that don’t regularly interact. Each of the systems a cannabis business uses contains valuable information about revenue, expenses, sales, and more, but you can’t make use of that data or take a look at it in a broader context if it’s locked up in one place.
Why are data silos a problem in the cannabis industry?
Silos are real and a significant issue for cannabis companies. Because things move so quickly in the industry, it’s not uncommon for a business to introduce a tool to solve a problem, but find out later that it’s not compatible with their existing tech stack. This presents a risk because you may have helpful data in System A, but it’s useless without more data from System B.
By not uniting these systems, you may not be able to produce useful reports, and you may miss out on significant findings. Data silos can result in missing trends you could have capitalized on, or not spotting issues before they grow into serious problems. In an industry where budgets are tight and every dollar counts, missing out on these insights can be extremely costly.
Data silos can also impact business growth in other ways. For example, you’ll need to provide comprehensive documentation when applying for cannabis banking, securing funding, or accessing other financial services. When your data is scattered across multiple systems, gathering it and formatting it into an easily digestible format can be a real challenge. This can slow down the application approval process and leave your business without access to much-needed financial services while the financial institution parses your data.
However, overcoming these data silos can improve your internal operations as well as offer a level of transparency that builds trust with financial institutions.
An integrated software system: The solution to data silos
Breaking down data silos is a big job. It requires standardizing data that may be categorized or labeled differently across various software platforms. It means organizing and formatting data in a way that’s easily digestible. It also means physically integrating systems that may not always play nice together so they can seamlessly share data moving forward. Everything has to be automated; manually updated spreadsheets won’t cut it at the scale you need.
With Green Check Access, you won’t have to do all that complex technical work yourself. Green Check Access is a unified API — short for “application program interface” — that connects to dozens of cannabis-specific systems. This API does the heavy lifting, so you don’t have to hire a tech team to do it in-house. Just tie your software into our existing infrastructure, and you can get access to streamlined, sorted data that you can put to work for your business. Best of all, Green Check Access delivers sensible data in easy-to-understand visualizations.
Support your decision-makers with 360-degree access to all your business data. After all, it’s your data — why not make it work for you?