The Accomplished Solopreneur

Issue 24.16

Saturday, April 20, 2024

image courtesy of DALL-E via ChatGPT

Information Overload - be careful what you ask for

Earlier this week one of my SoloBOSS users wrote in and asked:

Can I see the value of all the deals I closed last year / month etc, and what my forecast looks like for the next quarter or so?

In principle, I can add that feature to SoloBOSS, but the question had me think about data, and information, and what we do with all of that.

So here is the key question you need to ask, and how to avoid information overload.

The key question you need to ask

There’s so much information out there, and the systems we use can provide us with so much data, we’re tempted to want all the information, and all the data.

But that leads to information overload.

There’s so much information and data available we can spend all our time just looking at it. Or as happens in most cases, we get the data / report / information, look in wonderment (or dismay) at what it tells us, and then never look at it again.

We can avoid this kind of information overload by asking one key question:

Once I have this information, what am I going to do with it?

Let me illustrate with an example.

Sales forecast data for sales teams

Sales forecasting is a tremendously useful tool for sales teams. In principle, you combine a bunch of factors like:

  • Number of leads
  • Which product(s) they’re interested in
  • Where they are in the sales pipeline
  • The sales person’s assessment

And use a formula to calculate the sales pipeline deal value. For example, a client who just enquired about a $20K product is early in the sales process, so we may put the probability of purchase at 10% which makes the pipeline value $2K. A client who is much closer to making the purchase may have a 90% probability of buying, so the pipeline deal value is $18K.

This information is useful to a sales manager. If I know I need to constantly have a total pipeline value of $1M, I know when I need to put more effort into helping and motivating my sales team. If I have well over that amount, I can proudly report to management that the future is bright.

Sales forecast data for small businesses

It’s tempting to think that same kind of information is useful for small businesses. If you’re large enough to have a sales team, it certainly can be.

But if you’re small enough that you only deal with a small number of clients at the same time, or you do all the sales yourself, here’s what is most likely happening:

  • You already know (even instinctively) what your sales forecast looks like.
  • You already know what you need to do about it.

Spending time creating a simple sales forecast can help - but you need to seriously think about what additional value this will give you. If there’s real value, great. If not, you already have everything you need to know what you need to do.

Sales forecast data for solopreneurs

As solopreneurs we can only work with a small number of clients at any time, so we’re in the same situation as the small business owner:

  • We already know (even instinctively) what our sales forecast looks like.
  • We already know what we need to do about it.

In this case, it may be good to have a list of leads we’re working on (which SoloBOSS already supports), and spending a lot of time creating something sophisticated is rarely worth the effort.

The underlying principle

The key question is “once I have this information, what am I going to do with it?”

In the case of the sales forecast data above, let’s imagine for a minute that you have a report that shows you what your sales forecast looks like. There’s only really two things we can do with this information:

  • It’s looking good, so we can relax.
  • It’s not looking so good, so we need to get nervous.

Or better, do something about it.

The point is this: you probably already have a pretty decent idea of what your sales forecast looks like, so you already know if you need to spend more time marketing and nurturing your leads.

The principle underlying this is simple:

Do the very least you need to get stuff done.

This doesn’t mean skimping on quality. It means that if we know something, we don’t need a report to tell us what we already know. We don’t need all the bells and whistles of a fancy system - we need just the things to get the job done well.

In my case, I will be cutting the cord with my accounting system because I don’t need all the features they include. That’s almost $1K per year in business expenses gone.

How to avoid information overload

We have a principle and a key question:

  • The principle: Do the very least you need to get stuff done.
  • The key question: Once I have this (new) data / information, what am I going to do with it?

If you really don’t know something (like what your future cash flow looks like), it’s worth spending the time to figure it out so you can do something to fill in the low spots.

But if you already know something, don’t spend the time and effort to create a fancy report. It won’t tell you anything more.

If you’re a fan of minimalism, you will recognize that we can get away with fewer, simpler things.

Hope that helps.