One of the reasons I love working with Michael is the new perspective he brings to the business.  He might not be able to knit a hat, but he can tell me that this winter, I should be doing different things to improve my sales.  Today he touches on one of the tools you can use to make business decisions – data analysis.

We are all surrounded by data.  In our daily lives, from the morning commute to the afternoon water-cooler conversations, there exists a wealth of data in the world around us. Data is one part in a hierarchy of ways to think about and interpret the world around us.  Unto itself, individual data points have no meaning. It is only with analysis that information, which is data that is used to make decisions, can be derived.  This decision-making lends us knowledge, which is the goal of informed decision-making.  By being able to interpret and synthesize the data available in any industry, business owners can take advantage of opportunities.

My day job is as an IT manager for a healthcare technology company in DC; in this role I deal constantly with large data sets, turning various discreet data points into usable knowledge.  This type of analytic approach is vitally important for small businesses (and the craft industry) in order to understand the market and position yourself to take advantage of trends.  For fiberarts businesses (both LYS’s and designers/publishers), this is doubly important; with any commodity based industry, trends can come and go at a breakneck pace.  What was trendy last fall may have fallen by the wayside this year; it is only by being able to analyze the market that you can position yourself to act accordingly.

In the Fiberarts industry, there is a wealth of discreet data that is ripe for the picking.

Bristol, (BristolIvy on Ravelry) writes a regular series entitled The Stock(inette) Market where she takes an in-depth look at pattern sales trends based on Ravelry data for a period of time.  She aggregates this data, and then provides the analysis to be able to discern trends and areas of growth. This provides savvy designers a starting point for getting an idea of where the market is headed.  For example, in her most recent post covering the month of September, she finds that as we head towards the cooler months, neck accessories are the dominant sales driver, along with cold weather accessories such as hats, mittens, and gloves.  Gathering this information over a period of time, up to and including years, the savvy statistician can paint a picture of the market, and be able to position themselves to take advantage of publishing patterns at the opportune time.

For TNNA members, the organization offers a wonderful resource in the form of a series of surveys they conduct of all fiber artists on a regular basis.  This data consists of a wide range of information, from yarns frequented to number of projects on needles at one time.  In addition to being able to demonstrate current trends, the TNNA data is presented in comparison to previous surveys, to show trends over time, a powerful way to look at data to gain insight into the future.

Ravelry itself can be a source of data, such as in the graph below, mined from our Tinking Turtle sales.

One must be wary, however, in relying completely on technology to package and interpret data for us.  Technology can be useful to turn data into information, however it is that human interpretation that gives analysis it’s kick.  If computers could provide the right analysis every time, there’d be no need for weather forecasters, for instance.  How you turn data into knowledge is what differentiates man from machine.  This is an important distinction for business owners for all fiberarts related businesses.  Creating knowledge is one of the cornerstones for how one can grow a successful business in this or any industry.