What Is Business Statistics and Why Does It Matter?
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- Business statistics is the application of statistics to analyze business data.
- Companies use business stats for forecasting, testing correlations, and describing data.
- A career in business statistics can be a good choice for people with strong math skills.
Imagine you have a sweater factory and don't know how many sweaters to make. If you make too many, you're wasting money, and if you make too few, you're missing the opportunity to sell more. So how do you find the perfect number? Business statistics has the answer.
Professionals in the field of business statistics apply statistical methods to answer business questions. This could mean describing a complex financial situation, predicting customers' behavior, or determining if an ad campaign is working to drive sales.
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Business statistics is a fundamental tool of business analytics. For those who want to pursue a career in business analytics, coursework in business statistics is a must.
Why Does Business Statistics Matter?
Business statistics help companies understand their present and predict their future. This can save organizations money, help them find new opportunities, and improve their efficiency. For example, using statistics to model sales patterns can help a company figure out how many employees they need to hire or how to scale production.
Medium- to large-scale businesses often hire specialists in business statistics to help them with their analyses. However, small business owners also use statistics to help with their operations.
|Covariance||Covariance is a measure of the direct relationship between two variables, showing how the change in one affects the other.|
|Descriptive Statistics||Descriptive statistics summarize and analyze a data set. For example, descriptive statistics can show the averages of a data set.|
|Inferential Statistics||Inferential statistics take measurements from a sample population, analyze them, and apply that analysis to a larger group|
|Mean||The mean is the average of numerical data points. It is calculated by adding the data points together, then dividing the sum by the number of points.|
|Median||The median is the center number in a list of numerical data points arranged from lowest to highest.|
|Mode||The mode is the most frequently occurring number in a numerical data set.|
|Variance||Variance is a numerical measure of how far a data set is spread out from its average.|
Careers in Business Statistics
Someone working in business statistics typically has at least a bachelor's degree. Common majors include finance and business administration.Upper-level careers in business statistics often require a master's degree like an MBA. An MBA program teaches advanced statistical techniques and typically offers students more experience applying these techniques to real-world problems.
A common entry-level job in business statistics is financial analyst. According to the Bureau of Labor Statistics (BLS), financial analysts earned a median annual salary of $81,410 as of May 2021. Later in their careers, with experience and education, business professionals can negotiate their salaries and make far more. Senior economists, for example, earned an average salary of $112,650 according to 2022 Payscale data.
Economists use their business statistics skills to analyze the distribution and production of goods and resources. They can either work in an academic context, for the government, or for companies looking to better understand the impact of the economy on their industry.
13% projected job growth from 2020-2030
Financial Analysts use statistics and other mathematical techniques to examine financial data to help companies make a profit. This can include tasks like predicting the performance of investments, forecasting overall industry trends, and evaluating financial statements to determine a company's worth.
6% projected job growth from 2020-2030
Statisticians in business work exclusively with statistics. Common duties include exploring data sets to find a representative sample, forecasting trends in supply and demand, and developing mathematical models to analyze data.
33% projected job growth from 2020-2030
Bachelor's or Master's
Is Business Stats Right for Me?
Professionals with strong math skills can excel in business statistics jobs. As the work is highly analytical and focused on answering questions, it's a great fit for someone who enjoys solving puzzles using data. This work can be very solitary, though, which may make business statistics a poor match for highly social, relationship-focused professionals.
While some positions are available with just a bachelor's degree, a master's degree is required for job advancement in most positions. As business statistics is a competitive field, a master's degree or Ph.D. can help a candidate secure a position.
Business statistics could be right for you if you…
- Are a stellar math student with a strong command of numbers
- See the story embedded inside data and can effectively communicate that story
- Work well with computers and can understand complex statistical programs
- Work best on your own, crunching numbers and finding solutions
- Are willing to pursue a master's degree or Ph.D.
- Are willing to work long, challenging hours with tight deadlines
The Future of Business Statistics
Business statistics is currently a strong career choice. The industry is growing as fast or faster than other industries, with the BLS projecting 33% growth in statistician positions between 2020 and 2030. That equates to 15,000 new jobs.
The main drivers of growth right now are divided between private companies such as major tech firms and manufacturers, and major financial organizations, such as JPMorgan Chase, Morgan Stanley, and Goldman Sachs.
The business landscape, in general, is growing more reliant on business statistics. Generally, mathematical justifications for business decisions are seen as more sound than decisions based on qualitative data.
Frequently Asked Questions About Business Statistics
Is business statistics a competitive field?
Business statistics is a fairly competitive field. While many jobs are available, the high-stakes nature of business management means that employees tend to be highly vetted. Many corporations hiring business statistics professionals also have a culture that highly values education and prestigious colleges such as Ivy League schools.
Candidates can make their applications more appealing in a variety of ways. Additional education, such as a master's degree, can draw attention and lend credibility to an application. Real-world experience, such as internships or published independent research, can also demonstrate skill in the field.
Can I work in business statistics without a degree?
Generally speaking, you cannot work in business statistics without a degree. While some jobs available without a degree use statistical techniques, business statistics positions typically require a bachelor's degree at a minimum.
Once you have started a career in business statistics, many positions require further degrees for job advancement. Common next steps include pursuing a master's in statistics, or an MBA with a quantitative concentration. Some people choose to pursue a Ph.D. and careers in statistical research, dividing time between academia and the private sector.
How much money can I make in business statistics?
Business statistics is a relatively high-paying field. Jobs tend to pay in the upper five figures on average, with certain positions, like economist, paying over $100,000 annually. Additional fields that use business statistics such as investment banking can pay even more, with many higher-level professionals making millions of dollars.
While salaries can be lucrative, it's important to evaluate all aspects of a position before pursuing a career. Some areas to consider include educational requirements, areas in which positions are concentrated in (and their costs of living), and work-life balance.
Is business statistics hard?
Business statistics is not necessarily hard, but it can be complex. Business statistics begins with very fundamental statistical techniques, such as regression and calculations of covariance. These skills are needed in many fields, including all forms of scientific research.
Where business statistics becomes complex is applying those techniques to real-world circumstances. Where the basic technique is simple, it can become tricky to know where to apply them. Real-world data is often messier than lab data and introduces complicating variables that might be easy to miss when determining the cause of a statistical fluctuation.