What is a Database?

what is a database

What is a database? A database is an organized collection of information. Small businesses can use databases in a number of different ways. A database can help you organize information about your customers and clients. A database can contain information about your product inventory. A database can track sales, expenses and other financial information.

What is a database NOT?

The purpose of a database is to help your business stay organized and keep information easily accessible, so that you can use it. But it isn’t a magic solution to all your data concerns.

First, you need to collect and input the data into a database.

Second, you need to organize and extract information from a database so that it is usable. For that you typically need a software program to help organize data, extract it, move it, and use it.

Database Versus Spreadsheet

A lot of small businesses are heavy users of Microsoft Excel or Google spreadsheets.  A spreadsheet may seem similar to a database.  But a spreadsheet is not nearly as powerful as a database for large volumes of information.

Also, getting information into and out of spreadsheets can be clunky.  You may have to do a lot of manual data entry, or manually exporting and importing data to other programs. And you can’t easily manipulate spreadsheet data — i.e., analyze it, move it into other applications, or run reports with it.

Databases can make your organization much more efficient and give management valuable insights.  They help make sense of your information. They can help you make your products and services more valuable. They can help you sell more.

For example, if you own an online store, you could use a database for your website to keep track of customer data, purchases, prices, and other information. This can be transferred directly into your accounting system — saving you the time to collect the data, find the corresponding spreadsheet, and input the data yourself.

With sophisticated software, this data could be used on the fly to make suggestions for additional purchases.  The data can also help you manage inventory levels, to know when inventory is getting low or when something is out of stock.

Databases for Non-Technical Business People

For small business owners and non-IT staff, databases really need to be wrapped up in a software program to be useful.  Unless we are in technology roles, most of us won’t be coding and tapping directly into a MySQL database.

You use databases all the time and may not realize it.  Online software services we use today have some kind of database built into them. An accounting software program or an ecommerce application, will have a database inside it.

That’s great if you need a standard accounting program or ecommerce store.

But what about the parts of your business with unique workflows?  Or processes that are unique to your business?

That’s where non-technical database applications come in today.  With one of the business-friendly databases (sometimes called desktop databases), you can set up and customize a database specific to your business and your workflow — and you don’t need to be a coder.

Microsoft Access is one.   Quick Base is another that is reasonably friendly for non-IT staff, and you can even use it to create mobile apps.  Filemaker is a third popular choice, and it’s especially popular for Mac, iPhone and iPad.

These kinds of business-friendly databases can be used to house, track and use data that you might not find an off-the-shelf software program to do.  You can use them to create customized executive dashboards.  But you don’t have to hire a software developer.

Using a desktop database application is like developing custom software applications for your business, without the complexity and programming expense.

Database Photo via Shutterstock


Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

5 Reactions
  1. Shawn Hessinger

    Thanks for the great explanation, Annie. We entrepreneurs need to have at least a basic grasp of technology, even those of us who aren’t tech wiz kids. It’s so helpful to have these basic tech explanations here in the Small Business Trends community for easy reference.

  2. I didn’t realize how important it is for small businesses to have databases and I am glad that I found this article. It makes a lot of sense that a database is extremely efficient and provides a lot of insight into your business and its management. I have been thinking about starting my own business and I will make sure to keep this information in mind for the future.

  3. I didn’t realize that a database is more powerful than Excel when it comes to large volumes of information. My brothers’ company is growing, and he is finding it harder for his spreadsheets to keep up. Is there a tool that will convert his Excel documents to a database?

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