How Can Statistical Tools Be Valuable in Business?

Graphs can help you see where your company is headed.

Statistics is often associated with the stock market, baseball scores and politics. However, statistics isn't just for the news--it can be a valuable tool for any size business. From predicting sales to knowing where to invest, statistics tools like graphs, charts, sampling and regressions can help any size business succeed in the marketplace.

Graphs and Charts

Graphs and charts can provide a graphical representation of any aspect of your business. Graphs and charts can help you see if sales are declining or growing, predict where you should invest your money, and show which salesperson has exceeded their sales goal for the year. Graphs and charts can compare values, contrast values or show a timeline. You can probably make a chart or graph using software already installed on your computer: Microsoft Office, Open Office, or Lotus 123 all have the capability of producing professional looking graphs and charts.

Sampling

Many businesses need to survey their customers to find out preferences and buying habits. The trouble is, it's not always possible to survey all of your customers. For example, time constraints or fiscal requirements could prevent you from surveying your customers, especially if there are hundreds or thousands or even millions of them. The answer is to survey a representative sample of the population and statistical tools that figure out an appropriate sample size can help you. Free sample size calculators are readily available on the internet.

Regressions

If you have a pile of data but have no idea what the data is telling you, regression analysis can help you make sense of the data. Tools for regression analysis allow you to enter your data into a program. The program will then calculate an equation for your data and produce a graph that closely matches your inputted data.

Descriptive Statistics

Descriptive statistics tools provide key data for your business. Often you'll need to know how much an average sale is, or what the maximum price that you can expect for an item is. Descriptive statistics tools can assist you with figuring out averages, minimums, maximums and ranges of data.

References

• Statistics How To: Topic Index