Analysing trends to improve business

Spending time analysing your business results is valuable if the insights help you to improve your business.

Genuine trend analysis will help reveal trends in your business's performance that aren't necessarily obvious from day-to-day performance figures.

You can analyse your business performance for trends by:

  • doing financial calculations
  • looking at ratios
  • creating tables of information
  • graphing results over time.

Conducting useful trend analysis

Analysing one trend is rarely useful, but when trend information is combined with other business observations and information, it can be a powerful tool for business decision-making.

Here is an example of staff turnover:

Staff turnover in 2017

  • First quarter 10%
  • Second quarter 14%
  • Third quarter 16%
  • Fourth quarter 8%

The information above indicates staff turnover has dropped recently—usually a good sign. This doesn't tell you how it will impact on your business. To find out you need to analyse other factors.

The table below shows something more useful than the information above does on its own.

Staff turnover from 2015-17

First quarter 10% 3% 2%
Second quarter 14% 7% 5%
Third quarter 16% 5% 2%
Fourth quarter 8% 3% 1%

In isolation, the information indicates a positive result. When compared to the table, turnover per quarter is significantly greater than in previous years.

There is an upward trend in staff turnover. This gives you a warning that staff turnover is becoming a problem and you may need to take steps to alter the trend.

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