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The Future of Micro-Biz Data

Data was a central theme of discussion at this year’s annual member meeting in Sacramento. How are we collecting data? What exactly are we measuring? How can data be used to support our clients and organizations more effectively? Several key points were raised:

  • Funding and policies are driven by data;
  • Much of this data quantifies success in a very limited way;
  • Most MDOs and government programs create jobs in a short term way under the current model;
  • Therefore, developing new metrics for measuring outcomes and impact is vital to developing a truly successful micro field.

The criticisms of the current measures fell into two broad categories:

  • Metrics do not track or account for long-term sustainability.
  • Metrics do not consider how clients define ‘success,’ instead rely on the number of jobs created or amount of profit generated in a single year.

Success and the Single Operator

Not every micro-business or entrepreneur is growth-oriented. As Emergent Research reported, many entrepreneurs are happy with the current size of their business and have no plans to grow. Adding more employees, or shifting from part-time to full-time employees, can sometimes move business owners away from the reasons they started their own businesses in the first place — the larger the business grows, the less flexibility the entrepreneur has with their schedule, and the less time they can spend doing the hands-on work they love. Success for these companies can’t be measured by the number of employees hired or an increase in business, but instead by the ability to sustain the owner’s lifestyle across ten, fifteen or twenty years.

Many data collections efforts don’t do a very good job at capturing this type of “social data” – most members know how many clients they see in a year, and how many loans they’ve made or classes they’ve run, but they don’t always know how many business they worked with five years ago are still operating, and how many business owners are happy with the state of their company. This is one of the reasons CAMEO has partnered with the FIELD at the Aspen Institute — microTracker and microTest are both excellent tools for collecting and analyzing this kind of long-term data.

It’s not just capturing data, either — members discussed ways in which new measures could be chosen and measured, and how to convince lawmakers and funders that these new measures are preferable to the old. In the coming months, CAMEO will continue this discussion, looking to identify key players among our members, their funders and regulators, and their clients to help change the way the industry collects and understands its data.